▲ Bitcoin (File Photo)
China's counter-espionage agency has urged caution regarding the use of cryptocurrency, stating that digital assets are being utilized for cyberattacks and anti-China activities.
China's Ministry of State Security announced via WeChat today (September 28) that "some harbor a dangerous misconception that receiving overseas funds via cryptocurrency can achieve true 'anonymous transactions' and evade legal sanctions by exploiting the feature of being 'untraceable.'" However, it stated that "cryptocurrency is not extraterritorial, and the so-called 'anonymity' is merely an appearance."
The Ministry of State Security warned that "cryptocurrency not only carries the risk of financial loss, but is also frequently used by overseas anti-China hostile forces and illegal elements in various criminal acts that destroy the financial order and threaten national security," adding, "We must clearly recognize its essence and raise our vigilance."
The ministry further explained that "from a technical standpoint, blockchain itself has core features such as openness, transparency, and immutability of data, making the anonymity of cryptocurrency fundamentally a false premise," and that "blockchain completely preserves data such as transaction records, providing a basis for tracking the entire path."
In particular, it emphasized that professional institutions can track actual users behind wallet addresses and reconstruct the entire fund flow process through technical means such as on-chain data analysis (blockchain transaction analysis) and big data comparison.
The Ministry of State Security stated, "In our country (China), cryptocurrency does not have the same legal status as fiat currency, and any illegal financial activities related to cryptocurrency are not protected by law." It added, "In February, the People's Bank of China and other authorities stated that cryptocurrencies such as Bitcoin, Ethereum, and Tether must not be circulated or used as currency in the market, and that business and activities related to cryptocurrency constitute illegal financial activities and will be cracked down upon."
It also urged the public to report to authorities if there are demands to provide sensitive data using cryptocurrency as bait.
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