China moves to toughen crypto money laundering laws

China aims to tighten crypto money laundering laws, proposing new evidence standards, presumptions of intent for mixer use, and a national platform for seized assets amid rising prosecutions.

A series of articles in China's Procuratorate Daily, echoed by multiple outlets, reveal a coordinated effort to strengthen the legal framework against cryptocurrency-based money laundering. These reports highlight major challenges in prosecuting such crimes, including difficulties in act characterization, evidence collection, and asset recovery, all complicated by the decentralized and anonymous nature of crypto transactions. Prosecutors suggest presuming criminal intent when suspects use mixers, privacy coins, or anonymous wallets. They also recommend that blockchain records and analytics reports be accepted as admissible evidence in court. Additional proposals include a “double investigation” model that scrutinizes both underlying crimes and digital asset flows, blockchain data self-verification, and the creation of a national platform for managing and selling seized crypto assets. The articles emphasize the need for cross-departmental and international cooperation, noting that the effectiveness of these measures will depend on their implementation. In 2024, over 3,000 people were prosecuted for crypto-related money laundering in China, underscoring the urgency of these reforms.