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The Supreme Court of China and public prosecutor have revised the country’s Anti-Money Laundering (AML) laws to include transactions involving virtual assets. This update marks the first major revision of the AML laws since their adoption in 2007.
During an August 19 conference, the Supreme People’s Court and the Supreme People’s Procuratorate introduced the updated interpretation, which now explicitly recognizes virtual asset transactions as a method of money laundering. This follows June’s uncovering of a giant embezzlement and money laundering scheme by a local bank, involving $248 million in illicitly converted funds.
Revised Regulations
Under the revised regulations, the transfer and conversion of criminal proceeds through virtual asset transactions will be subject to the same stringent controls as traditional money laundering activities. The laws now encompass activities aimed at “covering up and concealing the source and nature of criminal proceeds and their benefits by other means.”
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Penalties for individuals found guilty of money laundering involving virtual assets have also been defined more clearly. Offenders can face fines ranging from $1,400 (10,000 Chinese yuan) to $28,000 (200,000 Chinese yuan) for severe violations.
Additionally, those involved in more egregious cases could be sentenced to jail terms ranging from five to ten years. The amendments also introduce specific guidelines for determining what constitutes “serious circumstances” in money laundering cases, such as failure to cooperate with authorities or laundering amounts exceeding $700,000 (5 million Chinese yuan).
The Supreme People’s Procuratorate reported a rise in money laundering prosecutions, with 2,971 individuals prosecuted in the past year—a 20-fold increase since 2019.
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China’s Stance on Crypto
The revision of AML laws comes amid ongoing speculation about China’s stance on cryptocurrency. Industry insiders have debated whether the country might be considering a reversal of its strict crypto ban.
Notably, Galaxy Digital CEO Mike Novogratz hinted at the possibility of China lifting its Bitcoin ban by late 2024, though this claim remains speculative. Justin Sun, founder of Tron and Huobi (HTX), also fueled rumors with a social media post suggesting China’s unbanning of crypto might be imminent.
