Chinese authorities made a significant move on Monday by explicitly recognizing „virtual asset“ transactions as a method of money laundering. This marks the first instance in the country where such a decision has been made towards this asset class. The Supreme People’s Court and the Supreme People’s Procuratorate, China’s highest judicial bodies, jointly announced these changes during a press conference. The measures are expected to take effect on Tuesday and are part of broader efforts aimed at tightening anti-money laundering laws, specifically targeting the use of cryptocurrencies in illicit financial activities.
The new legal interpretation classifies virtual asset transactions, including those conducted through cryptocurrency exchanges, as acts that „cover up and conceal the source and nature of the proceeds of crime.“ Chinese authorities will now consider laundering amounts over 5 million yuan ($685,000) or causing losses of more than 2.5 million yuan ($343,000) as serious offenses under the law. These thresholds ensure that large-scale money laundering operations face stricter legal scrutiny and harsher penalties.
If convicted and sentenced to fixed-term imprisonment of up to five years, or if given criminal detention, individuals face a fine of no less than 10,000 yuan ($1,370). For sentences ranging from five to ten years, the individual will be fined at least 200,000 yuan ($27,400) in addition to their imprisonment. This move comes after China’s bans on Initial Coin Offerings (ICOs) in 2017 and cryptocurrency transactions in 2021, highlighting the country’s fluctuating approach to cryptocurrencies.
Former President Donald Trump also weighed in on the issue, emphasizing the importance of the United States staying ahead of Chinese technological advancements. Speaking at a campaign event in York, Pennsylvania, Trump stressed the need for the U.S. to lead in areas such as artificial intelligence and cryptocurrencies. He warned that failing to do so could result in China and other countries taking over these emerging technologies.
In conclusion, China’s decision to recognize virtual asset transactions as a form of money laundering reflects the country’s ongoing efforts to combat financial crimes involving cryptocurrencies. The stricter regulations and penalties imposed on individuals involved in large-scale money laundering operations send a clear message that such activities will not be tolerated. As the global regulatory landscape for cryptocurrencies continues to evolve, it is essential for countries to stay vigilant and adapt their laws to address emerging challenges in the digital asset space.