China’s Supreme Court has classified transactions involving “virtual assets” as a method of money laundering, enshrining this in law, according to local media.
The transfer and conversion of illicit proceeds through digital transactions now fall under provisions prohibiting the “concealment of the source and nature of criminal proceeds and other benefits.”
Offenders face fines ranging from 10,000 to 200,000 yuan ($1,400-28,000) or imprisonment for five to ten years. Aggravating circumstances include refusal to cooperate with authorities and laundering over 5 million yuan ($700,000).
According to the Supreme People’s Procuratorate, from 2019 to 2023, the number of convictions under the AML law increased 20-fold, exceeding 2,900 individuals.
This update marks the first significant amendment to the regulation in effect since 2007.
Measures taken by authorities throughout 2021 to tighten policies on cryptocurrencies and mining have effectively led to their ban in the country. Many industry companies have ceased operations in China. Digital asset traders face fines and even imprisonment.
In May 2024, Chinese authorities dismantled an underground bank with a turnover of $1.9 billion in USDT.