China cracks down on cryptocurrency betting

$1.5 million in cryptocurrency was confiscated by the Chinese government in connection with bets on the 2018 FIFA World Cup. Six people were arrested for their association with the platform.

On July 11, the Chinese news agency Xinhua reported that authorities in Guangdong province discovered an unknown gaming platform back in May. The platform accepted globally recognized cryptocurrencies including Bitcoin, Ethereum and Litecoin. Upon further investigation, it was determined that it was a traditional betting platform capable of accepting and paying out winnings in cryptocurrency. It was also found that the platform was hosted outside of China, which was a regulatory loophole for profit from gambling. 

Over the course of eight months, about 333 thousand users used the platform’s services, making transactions totaling about one and a half billion US dollars. Police seized one and a half million dollars in various cryptocurrencies and arrested six people suspected of organizing the operation of the platform. Also, $750,000 was seized directly from the bank accounts of the suspects.

Teams responsible for executing the plan to combat illegal sports betting continue to be on full alert. Gambling and betting are not prohibited in China, but all gaming platforms must be officially registered with the relevant government authorities in order to operate legally.

Chinese authorities began a massive crackdown on the cryptocurrency trading industry in September 2017, starting with a complete ban on ICOs. Within a month, local cryptocurrency exchange offices were forced to close and cease operations. Earlier this week, Bloomberg reported: "China's crackdown on cryptocurrencies appears to have succeeded. Volume in previously dominant Bitcoin-yuan trading has fallen to less than one percent of total volume."

According to Finance Magnates