China To Recognize “Virtual Asset Transactions” As A Method Of Money Laundering

It wasn’t long ago that China’s Supreme Court has recently revised the country’s Anti Money Laundering Laws to include “Virtual Assets” as a recognized method of money laundering.

Ever since the adoption of AML laws in 2007, this recognition marks as a significant step towards AML law upgradation.

As digital and virtual assets are becoming more prevalent in facilitating crime and money laundering, the need for revised AML measures is more than ever. 

Prevalence of Crypto Crimes

The recent crackdown by Qingdao police on a network that allegedly laundered over 8 million yuan (approximately $1.1 million) using the stablecoin Tether (USDT).

The suspects used business licenses and identification documents to open public accounts, which were then used to receive funds from criminals.

These funds were converted into USDT and transferred back to the criminals, with the syndicate earning a commission for their services.

As a result of the investigation, nine individuals are currently facing criminal charges and awaiting prosecution.

Was This Update Needed?

Following this case, The recent move by China is a part of their broader efforts to combat financial crimes, particularly as digital and virtual assets become more prevalent.

The updated law now covers the transfer and conversion of criminal proceeds through digital transactions, including virtual assets like cryptocurrencies.

Are There Any News Fines Involved?

Depending on the severity of the offense, people can now be subject to heavy penalties ranging from 10,000 to 200,000 yuan ($1,400 to $28,000). It may further include 5 to 10 years of jail term as well.

Additionally, the law now provides clearer guidelines for “serious circumstances” in money laundering cases, such as large amounts of money laundered or refusal to cooperate with authorities.

Speaking to the public at Precision Components Group on Monday in York, Pa., former President Donald Trump stressed the importance of the U.S. remaining ahead of Chinese technological advancements.

Are there any Future Prospects to Expect?

Speculation has emerged about China potentially unbanning cryptocurrency, although many experts remain skeptical due to the country’s political stance against free crypto trading.

The new AML regulations could be seen as a step towards stricter control over digital assets rather than a move towards liberalization.

Thus, China’s step towards revising their AML law to include virtual assets highlights the government’s intent to strengthen its regulatory framework against evolving financial crimes.

Read Also: 

• Bitcoin Fog: Roman Sterlingov Convicted In A $400 Million Crypto Laundering Operation
• China Modifies The Anti-Money-Laundering Legislation To Take Into Account The Risks Associated With Cryptocurrencies

While there is speculation about a potential shift in China’s crypto policy, the focus remains on tightening controls over digital transactions to prevent money laundering and other financial crimes.