A new report from Chainalysis has found that while Prc's share of global criminal crypto flows has been falling since the third quarter of 2022, the land still represents a disproportionate amount of money laundering and scam activity.

In its Aug. three "Cryptocurrency and China" study, Chainalysis stated that more than $two.2 billion worth of crypto had been sent from Chinese wallets to addresses associated with illicit action between April 2022 and June 2022.

Chinese addresses likewise received more than $2 billion worth of digital assets tied to nefarious activity such every bit scams and darknet marketplaces. Despite this, the report says criminal offense has fallen significantly:

"China's transaction volume with illicit addresses has fallen drastically over the time period studied, both in terms of raw value and in relation to other countries. Much of the drop is due to the absence of large-scale Ponzi schemes like the 2022 PlusToken scam."

Chainalysis added, "While China remains one of the height-ranked countries for illicit transaction book, it used to vanquish all others by a wide margin, suggesting that cryptocurrency-related law-breaking in the country has fallen."

The report's authors cite "historical transaction data" as suggesting that Chinese over-the-counter (OTC) Bitcoin (BTC) brokers "have played an outsized part in facilitating coin laundering for those involved in cryptocurrency-based crime."

The report adds that the "vast majority" of illicit Chinese crypto flows take been associated with scam action, although digital asset-based coin laundering is notwithstanding "disproportionately carried out in People's republic of china."

Chainalysis noted that China'south central regime conducted more than i,100 arrests associated with digital nugget-based money laundering in June, indicating a willingness to crack down on the sector.

"It will be interesting to see whether the arrests lead to a drib in flows of illicit funds to China-based cryptocurrency businesses and OTC traders."

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However, Chainalysis speculates that Communist china's increasing moves to clench downward on traditional decentralized cryptocurrencies may undermine the nation'southward status as a global crypto superpower moving forward.

The report attributes China's renewed hostility toward decentralized crypto avails to its plans for widespread adoption of the digital yuan.