China’s Supreme Court and public prosecutor have revised the interpretation of the nation’s Anti-Money Laundering (AML) laws, now officially recognizing “virtual asset” transactions for the first time.
The country’s existing Anti-Money Laundering Law, implemented on January 1, 2007, has undergone its first major update in nearly two decades with this recent revision.
During an August 19 conference, the Supreme People’s Court and the Supreme People’s Procuratorate announced that “virtual asset” transactions are now included as recognized methods of money laundering under the new legal interpretation.
This update coincides with recent speculation that China might soon lift its ban on cryptocurrencies, although many remain skeptical.
The courts clarified that the transfer and conversion of criminal proceeds through digital transactions are now subject to regulations prohibiting the concealment of the source and nature of such proceeds.
Penalties for violations include fines ranging from a minimum of $1,400 (10,000 Chinese yuan) to $28,000 (200,000 Chinese yuan) for more serious offenses. Additionally, offenders could face prison sentences of five to ten years.
Other amendments provide clearer guidelines on “serious circumstances” in money laundering cases, such as refusing to cooperate with authorities or laundering amounts exceeding $700,000 (5 million Chinese yuan).
The Supreme People’s Procuratorate reported that 2,971 people were prosecuted for money laundering last year, a 20-fold increase since 2019.
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Debate Over China’s Crypto Ban
Amid this legal update, some industry figures speculate that China might be considering reversing its cryptocurrency ban. On July 14, Galaxy Digital CEO Mike Novogratz mentioned on social media platform X, in a now-deleted post, that he had heard reports suggesting China could “likely unban” Bitcoin by late 2024.
On August 19, Justin Sun, founder of Tron and Huobi (HTX), fueled the rumors further with a comment on X asking for meme suggestions to suit China’s potential crypto unbanning.
However, several experts have dismissed the idea. In July, Yifan He, CEO of Chinese blockchain firm Red Date Technology, expressed doubt that China would ever allow its citizens to trade Bitcoin using local fiat currency freely. Mikko Ohtamaa, co-founder of algorithmic investment protocol Trading Strategy, agreed, arguing that such a move would contradict the government’s political agenda.
China initially banned crypto exchanges in 2017 and intensified its crackdown on cryptocurrencies in 2021.
Qingdao Police Tackle $1.1 Million USDT Money Laundering Case
In a related development, Qingdao police are prosecuting a case involving a network accused of using the stablecoin Tether (USDT) to launder over $1.1 million (8 million Chinese yuan) for criminal enterprises.
According to Chinese media, the main individuals involved allegedly recruited friends to use their business licenses and identification documents to open public accounts, which were then used to receive money from criminals looking to launder their proceeds. The funds were converted into USDT and transferred back to the criminals, with the money laundering syndicate earning a commission. Nine individuals are currently facing criminal charges and awaiting prosecution.
Cre: cointelegraph.
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