Chinese Police Bring Down Darknet World Cup Gambling Ring

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Online gambling and games.
Towards the end of the World Cup, Chinese authorities were able to bring down the biggest gambling ring that operated on the dark web.

Going down as the most-watched event in the year 2018, the World Cup brought mixed feelings to billions of people across the globe.

Apart from that, it was the perfect opportunity for individuals and companies to make a kill out of gambling.

In China, just before the end of the World Cup, the local authorities were able to bring down a World Cup gambling ring that operated on the dark web.

It is said that the ring managed over $1.5 billion in bets all in the form of virtual currencies making the first of its kind in the country.

The Police Operation

Gambling is strictly prohibited in China, and for this reason, we see a situation where the law enforcement personnel are on the look for those involved in activities of such nature.

Also, if suspected, the authorities will not hesitate to crack the whip by doing whatever they can to arrest and prosecute those involved.

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Authorities from the Guangdong province in South China released an official statement on July 12 stating details about the operation that brought down the gambling ring.

The public was notified that six people found to be responsible for running the illegal platform were arrested and the cryptocurrencies used to stake seized.

More so, the bank accounts of the six individuals involved were all frozen.

This is not the first time that the Chinese authorities are cracking down on betting platforms.

About a week earlier, police in Beijing succeeded in bringing down another gambling ring worth $48 million and further arresting over 40 prime suspects for their alleged involvement in the ring.

While the gambling ring that was busted in Guangdong was bigger and operated on the dark web, the one seized by Beijing police was relatively smaller and relied on messaging platforms such as WeChat to spread the message and give out odds which would be helpful for those who wish to stake their funds.

In total, the authorities have successfully managed to arrest more than 500 individuals across the country because of their involvement in different gambling rings and in the process freezing the accounts of those found to be perpetuating the vice.

In a police statement a week after the fall of the platform, the authorities revealed that they had frozen over $38 million.

How the Gambling Platform Operated

Smartphone against gambling app screen.
Gambling is strictly prohibited in China, and for this reason, we see a situation where the law enforcement personnel are on the look for those involved in activities of such nature.

There are quite a few gambling platforms that operate on the clearnet; however, these are regulated by the respective bodies in their countries.

For the Chinese platform, it ran on the dark web and only accepted cryptocurrencies for those who wished to get involved.

As of now, the gambling ring is considered to be the biggest to have ever involved virtual currencies, but it would be no surprise if other ones sprout in the future.

Just after the takedown, law enforcement personnel revealed that the cryptocurrencies accepted by the operators of the ring were Bitcoin, Litecoin and Ethereum, which are among the digital assets used by some of the top markets in the dark web.

Even though there are other cryptocurrencies such as Bitcoin Cash, Monero and Zcash, which are also currently used in darknet markets, it is not clear why the ring had not yet adopted these altcoins.

Perhaps, a decision by the administrators because as of now, there are no official reports that show that the other three (XMR, BCH and Zcash) were in use.

How the Ring Started

The site started some months before the World Cup, and in its time in operation, it attracted more than 300,000 users from different countries, and in the process, more than 8,000 agents got additional income through an affiliate program of recruiting members.

Due to the large number of people the site hosted, it was evident that they would employ some dubious tactics to maximize profits.

They would analyze the betting patterns and manipulate the odds in a bid to have few winners.

By doing so, more people would count their losses as the admins laugh all the way to the bank.

Chinese Authorities Tighten the Noose on Cryptocurrencies

Cryptocurrencies falling from the sky.
Just after the takedown, law enforcement personnel revealed that the cryptocurrencies accepted by the operators of the ring were Bitcoin, Litecoin and Ethereum, which are among the digital assets used by some of the top markets in the dark web.

In the last quarter of 2017, China officially closed down all crypto exchanges in the country in a bid to regulate the industry which, if unregulated, could lead to the laundering of vast sums of funds in a short span.

In the process of doing so, those who wish to buy virtual currencies will have to use exchanges based in neighboring countries and regions.

The move is likely to see cryptocurrencies for those in China going at a higher cost as compared to China’s neighbors because of the transaction expenses.

Among the other reasons that drove the one-party state to crack down on digital currencies is that the possibility of those involved in the vice can use it as a means of evading tax, which is a serious offense that could lead to jail sentences and hefty fines.

Apart from initiating a ban on virtual tokens, the state also placed a ban on Initial Coin Offerings, which is a widespread method of crowdfunding. In their view, ICOs are an illegal method of fundraising.

C.M.

C.M.

With the urge to know more about everything around us, I am an enthusiast researcher and writer with keen interest in expanding my knowledge in a bid to be well versed. Through writing, I express and share my feelings, ideas, and thoughts for like minded individuals.
C.M.
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