Chinas foreign exchange regulator joins cross-border gambling fight

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Chinas State Administration of Foreign Exchange (SAFE) says it has fined 10 people a total of almost US$900,000 for using illegal foreign exchange transactions to obtain funds for overseas gambling activities.

The fines appear to be the latest in a series of recent measures taken by Beijing to combat cross-border gambling by increasing regulatory oversight and cracking down on capital supply chains.

According to a notice published by Chinas foreign exchange regulator, the 10 cases all involved the accused either using underground banks or illegal POS machines made available by domestic merchants. The transactions took place at various times between April 2017 and January 2020.

The State Administration of Foreign Exchange has strengthened the supervision of the foreign exchange market, severely cracking down on the illegal buying and selling of funds involved in cross-border gambling and maintain a healthy foreign exchange market, the regulator said.

The largest of the fines issued was RMB1,671,000 (US$260,000) to a Mr Cai, who accessed more than US$1.7 million in funds via 35 illegal foreign exchange transactions between March 2018 and March 2019.

However, the cases are described only as typical cases of violations, suggesting there could have been many more fines issued. SAFE did not elaborate.

These latest measures follow a growing list of public statements coming out of China against cross-border gambling activities, including the establishment in August 2020 of a blacklist of overseas tourist destinations said to be disrupting the nations outbound tourism market by opening casinos targeting mainland Chinese customers. Chinas Ministry of Culture and Tourism did not name any of those destinations but has twice claimed to have expanded the list in the 12 months since.

In April of this year, Chinas Ministry of Public Security outlined plans to destroy all cross-border gambling syndicates operating in China and cut off capital and technology chains, while Chinas central bank, the Peoples Bank of China (PBOC), pledged to further fight cross-border gambling by targeting capital chains within the financial sector.

The Cyberspace Administration of China (CAC) then outlined in June its own plans to crack down on offshore gambling groups and activities which solicit gamblers via websites and mobile applications in its territories.