The Supreme People's Court and the Supreme People's Procuratorate of China jointly held a press conference today to issue the "Interpretation on Several Issues Concerning the Application of Laws in Handling Criminal Cases of Money Laundering". The "Interpretation" will be effective from August 20, 2024. This is the first time that China has Since the implementation of the Anti-Money Laundering Law, this is the first major revision of the law in the past 20 years.
Virtual asset trading listed as money laundering method
There are 13 articles in total in the "Interpretation", the main contents include:
- Clarify the identification standards for the crimes of "self-laundering" and "money laundering by others", as well as the review and identification standards for the subjective understanding of the crime of "money laundering by others".
- Clarify the criteria for identifying "serious circumstances" in money laundering crimes.
- Clarify seven specific situations in which "other methods are used to conceal or conceal criminal proceeds and the source and nature of the proceeds."
- Clarify the principle of concurrent punishment for the crime of money laundering and the crime of covering up, concealing criminal proceeds, and proceeds of crime.
- Clarify the standard for fine amounts.
- Clarify the criteria for lenient punishment.
Among them, the "Interpretation" will list virtual asset transactions as one of the methods of money laundering, and make it clear that the transfer and conversion of criminal proceeds and proceeds through "virtual asset" transactions and financial asset exchange methods can be recognized as Article 190 of the Criminal Law. Article 1, Paragraph 1, Item 5 of Article 1 “concealing or concealing the proceeds of crime and the source and nature of the proceeds in other ways.”
Offenders face fines ranging from a minimum of US$1,400 (RMB 10,000) to US$28,000 (RMB 200,000), and for more serious crimes, offenders may also face five to ten years in prison.
Zhang Jianzhong, deputy director of the Economic Crime Prosecution Department of the Supreme People's Procuratorate of China, said that since the Supreme People's Procuratorate deployed and promoted anti-money laundering work in 2020, the anti-money laundering work measures of procuratorial organs nationwide have achieved remarkable results. A total of 2,971 people were prosecuted for money laundering crimes in 2023, which was the highest number of prosecutions for money laundering crimes in 2019. Nearly 20 times the number of people. In the first half of 2024, 1,391 people were prosecuted for money laundering crimes, an increase of 28.4% compared with the same period last year. The crackdown on money laundering crimes continued to strengthen.
Chen Xueyong, deputy director of the Third Criminal Division of the Supreme People's Court of China , said that underground banks have become the main channel for criminals to launder money and transfer funds. There are also new underground banks emerging. Upstream criminals use virtual currencies, game coins, etc. through underground banks. Cross-border transfers of assets involve high amounts of money and are difficult to investigate and deal with, which puts forward new and higher requirements for combating money laundering crimes.
Chen Hongxiang, president of the Third Criminal Division of the Supreme People's Court, mentioned that the People's Court will severely punish money laundering crimes in accordance with the law and increase its crackdown on money laundering crimes involving underground banks and the use of virtual currencies and game currencies.
Is China expected to lift its cryptocurrency ban?
It is worth noting that this is the first time that the Supreme People's Court and the Supreme People's Procuratorate of China have listed virtual asset transactions as one of the methods of money laundering. It is also the first time that the expression virtual asset transactions has appeared in judicial interpretations, which is inevitably confusing. Speculation, is China likely to lift its ban on cryptocurrencies soon?
Some industry executives on the community have previously speculated that China may be considering reversing its cryptocurrency ban. Galaxy Digital CEO Mike Novogratz posted a now-deleted X post last month, saying that he had heard reports that China Bitcoin may be unbanned before the end of 2024.
Tron founder Justin Sun also tweeted on the 19th to discuss related rumors:
What’s the best meme about China lifting its cryptocurrency ban?
However, some experts have also poured cold water. He Yi, CEO of Hongzao Technology, believes that China will never allow citizens to freely use local legal currency to trade Bitcoin. Mikko Ohtamaa, co-founder of the algorithmic trading protocol Trading Strategy, also agrees with this view, saying that China A 180-degree turn on cryptocurrencies would go directly against the Chinese government’s political agenda.
Action zone notes: China enacted a ban on cryptocurrency trading in 2017 and implemented a cross-departmental crackdown on cryptocurrency in 2021.
