The Chinese police in the city of Yancheng in Jiangsu province have arrested a group of developers behind a decentralized gambling app on the EOS network.
The Jiangsu police announced that it arrested 15 people and subsequently confiscated 1.3 million units of EOS and BTC that are worth a combined 26 million yuan, or $3.8 million.
The police said this is the first criminal case that it cracked down on that used smart contracts to operate illegal online gambling businesses inside China.
The dApp, called Biggame, allowed players to use EOS smart contracts to place bets on various games such as Dice and Texas Hold’em. Between June 2018 and December 2020, the team behind Biggame allegedly profited from the operations with crypto assets worth 60 million yuan, or nearly $10 million, law enforcement officials said.
The arrest is the latest example of Chinese law enforcement’s wider “Internet Cleansing Movement” that aims to crack down on any illegal online activities, from gambling and Ponzi schemes to telecommunication fraud and money laundering.