🌎 China Recognizes Crypto Transactions in Revised AML Laws

China’s highest court and public prosecution agency have recognized crypto transactions in their revised interpretation of the country’s anti-money laundering (AML) laws. At a joint press conference on Aug. 19, representatives of the Supreme People’s Court and the Supreme People’s Procuratorate announced several reinterpretations of China’s AML laws, set to take effect on Aug. 20.

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

Those found guilty will face penalties, including fines starting at 10,000 Chinese yuan (around $1,400) to 200,000 Chinese yuan (around $28,000 at current exchange rates). More severe offenders could also face jail time ranging from five to ten years.

The amendments to the AML laws involve 13 articles and are meant to provide clarity for the identification of money laundering crimes and the specific circumstances where certain regulations prohibiting the “concealing and covering up” of proceeds from criminal enterprise may come into effect. Additionally, the amendments have outlined the amount of fines and prison time breaking the AML laws will attract.

The amendments are the result of calls made earlier in the year by Chinese Prime Minister Li Qiang for the country to rewrite its AML laws to include crypto-related transactions. Furthermore, authorities in the country have promised to punish individuals using crypto and blockchain technology to commit crimes, with the People’s Procuratorate noting that crypto-related money laundering had become a major channel for criminals to hide their illicit wealth.

China has been experiencing an increase in crypto-related criminal activities, with the trend even becoming a major topic at the Chinese Association for the Study of Integrity and Law’s annual conference in late 2023.