China Intensifies Crypto Crackdown, Classifies Transactions as Money Laundering Tools

China has introduced rigorous new guidelines to tackle money laundering involving cryptocurrencies.

The Supreme People’s Court and the Supreme People’s Procuratorate have enacted these regulations to address various money laundering techniques using digital currencies.

Severe Penalties for Crypto Money Laundering

Under the new rules, individuals involved in using cryptocurrencies to hide the origins of illicit funds face serious penalties. The regulations specify that claiming ignorance of these activities will not be accepted in defence. Courts will assess the knowledge and handling of funds based on transaction details and the broader context of the activities involved.

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Transactions involving over 5 million RMB in laundered funds are categorised as particularly severe. Those who fail to cooperate with investigations or cause significant financial harm face heavy fines and potential imprisonment.

The guidelines extend to various methods of laundering money through crypto. These include the use of cryptocurrencies in pawn shops, high-risk investments, and cash concealment in retail and entertainment venues. Both individuals and organisations found guilty of such activities will face substantial fines and legal consequences.

Individuals who come forward to assist in recovering laundered funds may receive a reduced sentence, provided the crime is considered minor. Convictions for money laundering could result in financial penalties ranging from 10,000 RMB to 200,000 RMB and the possibility of lengthy prison terms.