Chinese addresses sent more than $2.2 billion worth of cryptocurrency to addresses linked to illegal activities between April 2019 and June 2021, according to the latest report from analyst firm Chainalysis.

Data, services, and analytics provider Chainalysis published a report in which it tried to assess the degree of influence of Chinese cryptocurrency holders on the digital asset market.

“Between April 2019 and June 2021, Chinese addresses have sent over $2.2 billion worth of cryptocurrency to addresses associated with illicit activity such as scams and darknet market operations, and received over $2.0 billion,” the report reads, hinting that China is an important part of the cryptocurrency ecosystem and has historically played a large role in cryptocurrency-related crimes.

The report notes that wallet addresses, which Chainalysis analysts estimate are controlled by users in China, accepted over $150 million in crypto transactions since January 2021. According to this indicator, China is second only to the United States.

However, the report emphasizes that while China remains one of the leading regions in the world in terms of the volume of illegal cryptocurrency transactions, its share in the global volume of transactions with illegal addresses fell sharply over the studied period, both in terms of raw value. and in comparison with other countries. Amid the tightening of crypto regulation, cryptocurrency-related crime plummeted in China.

The Chainalysis report also says that the digital yuan project that is developing in China may have the goal of tightening capital controls within the country. With the help of digital currency, the Chinese authorities will have the opportunity to exclude individuals and legal entities from the financial system for any violation. The centralized and government-controlled digital currency could become a tool of authoritarianism and tough financial oversight, analysts at Chainalysis add.