[NEWS] Chinese government to revise anti-money laundering law with crypto assets in mind

It has been revealed that the Chinese government is planning to revise the law with a view to combating money laundering using crypto assets (virtual currencies). The South China Morning Post reported on the 15th.

The draft amendment to the current anti-money laundering law, which was enacted in 2006 and put into effect in 2007, is expected to be discussed at a State Council meeting chaired by Chinese Premier Li Qiang and submitted to the National Assembly for review.

Yan Lixin, executive director of the China Anti-Money Laundering Research Center at Fudan University in Shanghai, said, "Money laundering using crypto assets is currently the most urgent and necessary issue, and legal reform is necessary."

The Chinese government's anti-money laundering efforts will reflect the government's policy of strictly banning the mining and trading of crypto assets, including Bitcoin (BTC), while keeping pace with the promotion of Web 3.0, including the use of NFTs.

The proposed amendments, expected to be passed next year, address new types of money laundering risks, citing Wang Xin, a professor at Peking University Law School who is involved in the discussions on the amendments.

Zhang Xiaojin, a senior prosecutor at the Supreme People's Procuratorate, said earlier this month that the government will step up efforts against money laundering and illegal foreign exchange trading crimes. He added that the government will now focus on prosecuting crimes related to the use of digital currencies.

Cryptocurrency transactions in China continue despite ban

Chinese authorities have stepped up their scrutiny of cryptocurrency-related money laundering cases. In 2022, 63 people were arrested for laundering 12 billion yuan (about $2.53 billion) using cryptocurrencies.

Meanwhile, there are reports of active cryptocurrency trading in mainland China, despite a total ban on cryptocurrencies in China. Last year, the major cryptocurrency exchange Binance is said to have traded $90 billion (approximately 13.5 trillion yen) in cryptocurrency in just one month. In addition, many businesses have evaded the government's foreign exchange monitoring by using stablecoins such as Tether (USDT) to exchange the yuan for other countries' legal tender and make profits.

The governor of the People's Bank of China also said in October last year that he would crack down on "speculative activities such as cryptocurrency trading," and is keeping a close eye on cryptocurrency, but in reality, cryptocurrency is being evaded. Therefore, it is unclear how much of a deterrent effect the law reform will have.

Reference: Report
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