- China’s Supreme People’s Court has released new measures aimed at combating money laundering through the use of virtual assets.
- The legal interpretation sets stringent conditions for prosecuting crimes related to cryptocurrency-based money laundering.
- From 2019 to 2024, prosecutions for money laundering in China have increased twentyfold.
Discover how China’s new stringent regulations are impacting cryptocurrency-related money laundering cases and what this means for the global crypto market.
China’s New Anti-Money Laundering Measures and Their Implications
The latest legal interpretation by China’s Supreme People’s Court targets the use of virtual assets in money laundering activities, imposing strict conditions for prosecuting such offenses. The guidelines classify cryptocurrency transactions as tactics for concealing illicitly obtained funds and closing existing legal loopholes. This development is part of China’s broader efforts to regulate its virtual asset market more rigorously.
Prosecution Statistics and Increasing Scrutiny
In 2024 alone, authorities prosecuted 1,391 individuals for money laundering, showing a 28.4% year-on-year increase. This statistic underscores China’s intensified efforts to combat financial crimes, with the total number of money laundering prosecutions skyrocketing to 3,000 cases in 2023, a twentyfold rise since 2019. The Supreme People’s Procuratorate has been at the forefront of these initiatives, working closely with entities like the National Supervision Commission and the Ministry of Public Security.
The Broader Context of China’s Anti-Money Laundering Drive
The new legal guidelines outline severe conditions under which money laundering activities are prosecuted. Transactions involving sums exceeding 5 million yuan or resulting in losses over 2.5 million yuan are categorized as ‘severe circumstances.’ Additionally, the legal interpretation broadens the definitions of ‘self-laundering’ and ‘money laundering by others’ and introduces guidelines for concurrent sentences when money laundering is committed alongside other crimes.
Case Study: The Plus Token Ponzi Scheme
In alignment with the intensified regulatory framework, $2 billion worth of Ethereum associated with the Plus Token Ponzi scheme was recently transferred, signifying government intervention. These funds, initially seized by Chinese authorities, have not been moved since April 2021, sparking speculation about the Chinese government liquidating seized crypto assets. The Plus Token fraud represents one of the largest crypto scams, and recent transfers indicate ongoing efforts by Chinese authorities to crack down on financial crimes.
Conclusion
China’s new measures to curb money laundering through virtual assets highlight the country’s commitment to stricter financial regulation. With exponential increases in prosecutions and enhanced interagency cooperation, China is setting a formidable example in the fight against financial crime. As the global crypto market watches closely, these developments may prompt other nations to adopt similar regulatory stances, emphasizing the need for robust legal frameworks to handle the complexities of digital asset-based money laundering.
