China Moves To Strengthen Crypto Money Laundering Enforcement With New Evidence And Asset Recovery Framework
In Brief
China proposes new crypto AML framework with blockchain evidence standards, criminal intent presumptions, and improved digital asset seizure management.
A paper published in the official newspaper of China’s Supreme People’s Procuratorate has outlined a sweeping prosecutorial framework for cryptocurrency money laundering cases, recommending presumptions of criminal intent, new evidentiary standards, and a national platform for seized digital asset management. The article, authored by researchers from Hunan Province’s Yuhu District People’s Procuratorate and Xiangtan University’s Faculty of Law, carries no legal force but signals institutional pressure to close the gap between China’s existing anti-money laundering statutes and the realities of blockchain-based financial crime.
Closing Legal Gaps and Redefining Evidence Standards
The article identifies a structural mismatch at the core of China’s current legal framework: while the Anti-Money Laundering Law has broadly expanded the scope of predicate offenses, Article 191 of the Criminal Law still limits money laundering charges to seven specific crime categories. In practice, this forces prosecutors to pursue many cryptocurrency laundering cases under the narrower “concealment crime” provision of Article 312, which the authors characterize as an overextended catch-all. To address this, the paper recommends that prosecutors proactively add money laundering charges in independent laundering activities, implement a mandatory “dual investigation” principle requiring analysis of upstream crimes, and develop blockchain analysis capabilities across judicial institutions.
On evidentiary procedure, the framework proposes adopting a principle of “self-authentication of blockchain data,” under which on-chain transaction records verified through public blockchain explorers and confirmed by consistent hash values would be granted preliminary authenticity, shifting the burden of proof to any challenging party. Analytical reports from compliant blockchain analytics firms — such as fund flow charts or address association analyses — would be admitted as expert testimony. Critically, the paper recommends establishing tiered presumption rules for subjective criminal intent: suspects who use coin mixers or privacy coins, conduct high-frequency transactions through anonymous wallets, or rapidly liquidate large crypto holdings at unreasonable prices would be presumed to have money laundering intent unless they can provide credible counter-evidence.
Asset Recovery and the Scale of the Problem
The paper separately addresses the persistent difficulties in recovering and disposing of seized cryptocurrency. Under current Chinese law, the regulatory prohibition on crypto trading leaves investigative agencies with few compliant channels to monetize confiscated digital assets, undermining both state confiscation interests and victim compensation. The authors call for a national-level cross-departmental platform to standardize asset custody, valuation, and disposal through mechanisms such as targeted auctions, supported by a dynamic expert valuation committee drawing on both on-chain data and international exchange prices.
The urgency of the proposal is underscored by the scale of the problem it addresses. Chinese prosecutors charged more than 3,000 individuals with cryptocurrency money laundering in 2024. According to Chainalysis, Chinese-language laundering networks processed approximately $16 billion in 2025, representing roughly one-fifth of all global crypto money laundering — a volume the firm attributes in part to domestic capital controls that incentivize offshore wealth transfers and supply liquidity to international criminal networks.
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About The Author
Alisa, a dedicated journalist at the MPost, specializes in crypto, AI, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
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Alisa, a dedicated journalist at the MPost, specializes in crypto, AI, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
