China’s supreme court recognizes crypto in landmark AML law update

China’s highest court and prosecution agency have recognized cryptocurrency transactions for the first time in a revised interpretation of the country’s anti-money laundering laws.

Representatives of the Supreme People’s Court and the Supreme People’s Procuratorate held a joint press conference on August 19 to announce several reinterpretations of China’s anti-money laundering laws, which will come into effect on August 20.

According to the announcement, one of the main highlights of the new interpretations was the listing of virtual asset transactions as a method of money laundering. According to Chinese authorities, the conversion and transfer of criminal proceeds via crypto will now be considered concealing the source and nature of criminal proceeds and their benefits “by other means.”

Those found guilty face a range of penalties, including fines ranging from 10,000 Chinese yuan (about $1,400) to 200,000 Chinese yuan (about $28,000 at current exchange rates), and more serious offenders could face prison sentences ranging from five to 10 years.

The amendments to the AML laws cover 13 articles and aim to provide clarity on the definition of money laundering offences and the specific circumstances under which certain regulations prohibiting the “concealment and concealment” of proceeds from a criminal enterprise may come into effect. Additionally, the amendments outline the fines and prison sentences for violating the AML laws.

The changes are the culmination of calls by Chinese Premier Li Qiang earlier this year to rewrite the country’s AML laws to include crypto-related transactions. Authorities in the country have also vowed to punish those committing crimes using crypto and blockchain technology, with the People’s Procuratorate alleging that crypto-related money laundering has become a major channel for criminals to hide their illicit wealth.

As Crypto.news reported earlier in the year, cryptocurrency-related criminal activity is on the rise in China, and the trend will be a major topic at the annual conference of the China Integrity and Law Studies Association in late 2023.