The article focuses on the high-pressure governance of illegal financial activities related to virtual currencies by national judicial and law enforcement departments, emphasizes that the Supreme People's Court report at the 2026 Two Sessions clearly stated that crimes such as money laundering and foreign exchange evasion using virtual currencies as a medium will be severely punished, analyzes the upgrading of their methods (such as coin mixers, cross-chain bridges, RWA spoofing, etc.) and their social harm, and provides guidance for prevention for the general public.
Article Author: Zero Time Technology
Article source: MarsBit
On the morning of March 9, 2026, the second plenary meeting of the Fourth Session of the 14th National People's Congress was held at the Great Hall of the People in Beijing. In his work report, Zhang Jun, President of the Supreme People's Court, clearly pointed out that: new types of crimes should be punished in accordance with the law, and crimes such as money laundering and foreign exchange evasion using virtual currencies as a medium should be severely punished. Efforts should be made to prevent illegal cross-border fund transfers and safeguard national financial security and social stability.
The report shows that in 2025, the Supreme People's Court concluded more than 31,900 cases, and courts at all levels concluded and enforced more than 36 million cases.
2026, the first year of the 15th Five-Year Plan , saw public security economic crime investigation departments nationwide, guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, fully implement the spirit of the 20th National Congress of the Communist Party of China and its subsequent plenary sessions. Adhering to political leadership, legal support, and personnel guarantees, they prioritized cracking down on illegal financial crimes related to virtual currencies as a core task. This signifies that the judicial and law enforcement levels have formed a joint force, and the fight against illegal virtual currency activities has entered a comprehensive, normalized, and high-pressure phase. Currently, virtual currencies have become a major channel for "laundering" criminal funds and illicitly transferring them abroad. This article, combining regulatory trends and new developments in crime, interprets the direction of governance and provides guidance for public prevention.
The state's attitude has remained consistent: from tightening regulations to severe judicial punishment, a comprehensive and high-pressure approach to governance.
Virtual currencies are not a "lawless zone." my country's supervision and crackdown on illegal financial activities related to virtual currencies have always been clear, firm, and progressively upgraded.
1. Clear definition at the policy level
The People's Bank of China and other departments have repeatedly issued documents clarifying that virtual currencies do not have the status of legal tender, and related exchanges, transactions, and intermediary services are all illegal financial activities that will be resolutely banned in accordance with the law.
2. The special operation continues to advance.
Nationwide efforts are underway to combat and govern money laundering crimes, with a focus on virtual currency money laundering, covering the entire chain from fund transfers and account management to platform investigations and overseas tracing.
3. Judicial trials enhance deterrence.
The Supreme People's Court has repeatedly included virtual currency money laundering and tax evasion in its work reports, and courts in many places have already made judgments on related cases, forming a judicial orientation of "conviction based on evidence and strict sentencing" and sending a strong signal of "zero tolerance".
The emphasis on severe punishment at this year's Two Sessions signifies stricter law enforcement, more precise judicial procedures, and stronger coordination . Any act of engaging in illegal financial activities using virtual currencies will face severe legal consequences.
Cryptocurrency money laundering crimes have evolved: the methods are more covert and the harm is more widespread.
Under intense regulatory scrutiny, methods of money laundering and foreign exchange evasion involving virtual currencies are constantly evolving, exhibiting characteristics of specialization, chain-like operations, and cross-border transactions , posing risks far exceeding those of traditional money laundering models.
The specific new methods are as follows:
1. Using decentralized tools to conceal the flow of funds
From simple virtual currency transfers in the early days, it has evolved into a composite model of "decentralized exchange (DEX) + mixer + cross-chain bridge". It does not require real-name authentication, and by mixing coins to obfuscate the trajectory of funds and transferring and splitting funds across chains, it makes it difficult for regulators to track the source and destination of funds, greatly increasing the difficulty of cracking down on it.
2. Using new concepts to disguise money laundering activities.
Money laundering has evolved from directly exchanging virtual currencies to using new concepts such as NFTs, GameFi, and RWA as a disguise, using "asset on-chaining" and "high-yield investment" as gimmicks to cover up the nature of money laundering. Among them, the tokenization of RWA is also easily distorted into a tool for capital flight, which is extremely deceptive.
3. Inducing ordinary users to assist in money laundering
The scheme evolved from its own money laundering operations to using models such as "money laundering," "investment on behalf of others," and "collection of virtual currency" to lure ordinary users into the scheme. With high commissions as bait, the scheme induces users to collect virtual currency and transfer funds on their behalf, making users unknowingly assist in "laundering" illegal funds and become accomplices in money laundering.
The social harms are multifaceted, specifically manifested in the following ways:
1. Irreversible financial losses
Illegal funds laundered through virtual currencies often flow overseas, making them difficult to trace and resulting in a low recovery rate. Once involved in a case, the financial losses of individuals and institutions are generally irrecoverable.
2. Becomes a "toolbox" for crime.
It provides convenient funding channels for upstream crimes such as telecommunications fraud, online gambling, and illegal fundraising, amplifies the social harm of various illegal and criminal activities, and disrupts social order.
3. Disrupting financial order
Evading foreign exchange regulations and illegally transferring assets across borders disrupts the normal financial management system and affects national financial security and economic stability.
4. Ordinary users are more likely to be involved in cases.
Even if someone is unaware of the activities such as "collecting virtual currency," "money laundering," or "transferring funds on behalf of others," they may still be considered an accomplice to money laundering and will be held legally responsible.
Money laundering involving virtual currencies is no longer considered a "gray area" of the industry, but a clear criminal offense, with the risks directly impacting every participant.
Prevention Guide for All: Stay Away from Money Laundering Traps and Uphold the Bottom Line of Law and Security
Faced with escalating judicial crackdowns and criminal tactics, individuals and organizations alike must remain vigilant and refrain from participating, assisting, or taking chances . Specific preventative measures are as follows:
1. Firmly refuse to participate in any illegal virtual currency activities.
We do not engage in the exchange of virtual currencies for legal tender, do not collect or pay virtual currencies on behalf of others, and do not participate in suspicious businesses such as "money laundering" or "arbitrage."
2. Be wary of high-yield temptations and identify money laundering schemes.
Be wary of sales pitches that promise "low risk, high return," "instant settlement," or "guaranteed principal on behalf of others." Any request for bank card information, wallet address, or seed phrase carries an extremely high risk.
3. Protect personal information and asset permissions
Do not disclose your wallet's private key or seed phrase casually, and do not lend or rent out your account or QR code for receiving payments, to avoid being used by criminals for money laundering.
4. Report any suspicious clues promptly.
If you encounter money laundering, illegal transactions, fraud, or other illegal activities involving virtual currencies, report them to the public security and financial regulatory authorities to jointly curb the spread of crime.
Foreword
The Supreme People's Court's work report reiterated that virtual currencies are not above the law, and money laundering and tax evasion will be severely punished . From policy prohibition to judicial action, from source control to full-chain crackdown, the state's governance system for virtual currency-related illegal activities is becoming increasingly完善 (perfected/improved), and the intensity of the crackdown continues to increase. Virtual currency money laundering may seem covert, but in reality, it is fully traceable, the risks are predictable, and the responsibilities are accountable. Any侥幸心理 (gambling mentality) will pay the legal price.
