China’s Supreme Court and public prosecutor have revised the interpretation of the country’s Anti-Money Laundering (AML) laws to now include “virtual assets” transactions for the first time.
This marks the first major update since the AML law was implemented on January 1, 2007.
During an August 19th conference, officials announced that virtual asset transactions would now be classified as a recognised method of money laundering under the new legal interpretation.
This change comes amidst ongoing speculation that China might unban crypto.
Under the revised law, any transfer or conversion of criminal funds through digital transactions will fall under regulations that prohibit “covering up and concealing the source and nature of criminal proceeds and their benefits by other means.”
Offenders could face fines ranging from 10,000 yuan ($1,400) to 200,000 yuan ($28,000), along with prison sentences of five to ten years for more serious offences.
The update also introduced more specific guidelines on what constitutes “serious circumstances” in money laundering cases, such as the involvement of more than 5 million yuan ($700,000) or non-cooperation with authorities.
In 2023, 2,971 individuals were prosecuted for money laundering in China.
China is unbanning crypto?
In a now-deleted July 14 X post, Galaxy Digital CEO Mike Novogratz posted that he heard reports suggesting China is “likely to unban” Bitcoin by late 2024.
Tron founder Justin Sun hinted at the possibility on social media, while others argue that such a move would contradict China’s current political stance, as seen from previous crackdowns in 2017 and 2021.
However, several experts have also denied the idea.
In July, Yifan He, CEO of major Chinese blockchain firm Red Date Technology, said he didn’t think China would ever allow its citizens to freely trade Bitcoin using local fiat currency.
In other news, authorities in Qingdao are prosecuting a money laundering ring involving the stablecoin Tether (USDT). The group allegedly laundered 8 million yuan ($1.1 million) by using public accounts opened with business licences and identification documents, converting the funds to USDT before returning them to criminals. Nine individuals are currently facing charges.
