China has identified a new form of corruption facilitated by cryptocurrencies and Blockchain technology, complicating the financial system. The use of gift package transfers and electronic gift cards in the crypto sphere has allowed for the seamless transfer of illicit benefits within networks, posing significant challenges to corruption detection.
The China Integrity and Law System Research Association, recognized as a national social organization by the China Law Society, discussed new types of corruption and strategies to combat them at their annual meeting. The rise of these new corruption forms was highlighted, emphasizing the increasing difficulty in tackling corruption.
In November 2023, the Central Discipline Inspection and Supervision Commission’s website shed light on evasion tactics under high scrutiny. Individuals used electronic consumption cards and electronic receipt coupons, masking transactions with electronic gift packages and cards to evade oversight, representing a challenge to traditional regulatory frameworks.
Despite recognizing the emergence of this new corruption form, legal and technological frameworks lag behind. The anonymity and decentralized nature of cryptocurrencies like Bitcoin make them difficult to control. Some individuals exploit the “cold wallet” feature of cryptocurrencies to conduct activities, transactions, and payments outside the scope of online investigations.
Experts at the 2023 annual meeting suggested multifaceted strategies to combat new corruption types and covert corruption. They emphasized the need for legal improvements, technological advancements, and increased societal and public scrutiny. Mo Hongxian, a professor at Wuhan University’s Law School, stressed the importance of developing corruption crime legislation to clarify the legal nature of new corruption types and establish rules for their prosecution. An ongoing amendment draft to the Criminal Law presents an opportunity to address electronic gift package transfers and related behaviors.
The fight against new corruption types and covert corruption requires a comprehensive and adaptable approach, including legal reforms, technological advancements, and public participation. As the corruption landscape evolves with technological innovations, staying ahead with legal and technological developments becomes imperative for effective governance and social justice.