Number of Chinese CBDC-related Criminal Cases on the Rise

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China’s rapid CBDC progress is causing a rise in digital yuan-related criminal cases, including suspected fraud, identity theft, and phishing.

Per the Shenzhen Securities Times, a Shanghai court this week convicted a group of criminals that exploited CBDC functions on an ATM to steal cash.

A spokesperson for the People’s Court of Shanghai’s Yangpu District branch explained:

“The criminals used the ATM’s digital [yuan] exchange functions to withdraw [most of] the cash stored in the machine in just two hours.”

The court heard that the incident took place in May 2023 in a busy part of Yangpu District.

Prosecutors explained that an individual surnamed Wang masterminded the robbery.

Wang “used digital yuan accounts registered with more than ten different mobile phone numbers” to exploit the ATM, prosecutors said.

The court heard that Wang and others then “made 30 cash withdrawals via the ATM’s digital yuan exchange function.”

Wang and the group total managed to steal over $17,150 worth of banknotes in this manner – “almost all the cash stored in the ATM at the time.”

Bank staff made note of the high volume of exchanges and “immediately” alerted the police.

Officers soon found that Wang was part of a wider group of financial fraudsters operated by an individual surnamed Xiao.

The Wujiaochang Square in Yangpu District, Shanghai, China. (Source: Jianhui Gong [CC BY-SA 4.0])

The investigation continued, with officers eventually discovering that Xiao had overseen the theft of $1.4 million worth of cash from “more than 900 digital yuan accounts.”

The gang used “telecommunications network fraud” to target individuals and companies, obtaining key data that let them steal funds.

Criminals ‘Taking Advantage’ of Chinese CBDC Pilot

The Shanghai High Court issued a statement noting that “due to the development of the digital yuan, criminals often take advantage of the public’s enthusiasm to participate in the pilot.” The court warned the public:

“Do not click on URL links, emails, or visit websites from unknown sources. Instead, the public should obtain information on the CBDC via official channels.”

Last year, criminals in Kunming successfully hacked a man’s phone, forcing the handset to use his e-CNY funds to buy e-gift cards.

The media outlet concluded that digital yuan-related “anti-money laundering regulatory policies” “need to be upgraded” to thwart increasingly sophisticated criminals.

Police started dealing with the nation’s first recorded CBDC fraud case in June last year.

In October, officers warned of a sharp rise in digital yuan-themed scams throughout the nation.

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