China Witnesses Another Fraud Case Related To Digital Yuan

With a new case of Digital Yuan fraud lodged to the police in the eastern province of Jiangsu, China has seen more fraud cases related to its digital currency this month alone.

As reported by a local Chinese media, Modern Express, on Monday, the Police force in Gaoyou, a city under the watch of Yangzhou in Jiangsu province, received a report earlier this month from a defrauded resident who said she was scammed. She got a call from the suspect who accused her of involvement in a fraudulent case and went ahead to ask for her personal bank account details and some other verification codes.

With the details provided by the victim, the suspect created an e-CNY digital wallet with her identity and topped it up with more than 300,000 Yuan (approx. $47,000) from her bank account. Eventually, the money was transferred to the suspect personal digital wallet.

During the Police investigation, the local police realized money had been flowing to a particular digital yuan wallet with the surname Li in East Shandong Province. Following the discovery, Li was detained for money laundering suspicion, and about 60,000 yuan (approx. $9,400) in his account was confiscated.

This case reported by this victim is not the first case of money laundering through e-CNY handled by the police. The police force in Xinmi (a city in the Henan Province of Central China) has, earlier the month, received a report of a tele-fraud involving e-CNY.

China has been at the forefront of launching the major central bank digital currency in the world. The issuance of the digital currency named e-CNY and e-RMB alternatively is being handled by the PBOC – People’s Bank of China. The country is looking to launch the digital currency formally in February 2022 during the Beijing Winter Olympics Games.

In the technical white paper released in July, the central bank noted that the digital currency would not run a 100% anonymous system, but it has a level of anonymity. In the white paper, the central bank urged citizens to guard against the possibility of using the digital currency for illicit activities like Money laundering, internet gambling, tax evasion, tele-fraud, among others, by making sure that every transaction they use the digital currency for meets the AML (Anti-money Laundering) and ATF (Anti-Terror Financing) requirements.

All across China, the trials for the digital currency are underway, and every resident that signed up will receive coupons worth 50 yuan in e-CNY (approx. $7.83).