- China’s AML laws now include virtual assets as recognized money laundering methods.
- Offenders face fines up to $28,000 and jail terms of 5-10 years for severe cases.
- Penalties increase for laundering over $700,000 and non-cooperation with authorities.
The Supreme Court of China and public prosecutors have made a pivotal update to the country’s Anti-Money Laundering (AML) laws, recognizing virtual asset transactions as a method of money laundering for the first time. This marks a significant shift in China’s legal approach to financial crimes and its relationship with digital assets.
The revised interpretation came after nearly two decades since the AML law was first implemented in 2007. It introduces new measures to combat criminal activities in the digital realm, a response to the growing influence of cryptocurrencies and blockchain technology.
First Significant Legal Update
The update to China’s AML laws was announced during an August 19 conference by the Supreme People’s Court and the Supreme People’s Procuratorate. Under the revised law, virtual asset transactions are now explicitly recognized as a money laundering method. This update is part of broader regulatory changes to counter illegal activities in an increasingly digital world.
These changes will address the transfer and conversion of criminal proceeds through digital means, which had not been fully covered by previous laws. This move aligns with China’s ongoing efforts to curb financial crimes and is expected to reinforce the country’s stance on illegal transactions involving digital assets.
Penalties for Money Laundering Offenses
The revised AML law not only includes virtual assets but also establishes stricter penalties for those involved in money laundering activities. Criminals convicted under the new interpretation of the law face financial penalties ranging from 10,000 yuan ($1,400) to 200,000 yuan ($28,000).
More severe offenses could result in prison sentences ranging from five to ten years. Additionally, the amendments provide clearer guidelines on “serious circumstances,” such as refusing to cooperate with authorities or laundering amounts exceeding 5 million yuan ($700,000). This heightened focus on serious cases reflects China’s commitment to stronger enforcement measures.
Crypto Regulations Remains Unresolved
Amid the legal developments, recent speculation on social media has raised questions about China potentially reversing its long-standing ban on cryptocurrencies. Tron founder Justin Sun has fueled these rumors with a recent post suggesting that China has lifted its crypto ban.
Mainland China Investors: Access to Hong Kong’s Bitcoin ETFs?However, despite the excitement, there has been no official confirmation of such a policy shift. In the past, China had banned crypto exchanges in 2017 and further cracked down on crypto trading and mining in 2021. While these recent legal changes indicate the country’s growing engagement with digital assets, it remains unclear whether they signal a broader relaxation of the government’s stance on cryptocurrencies.
