Chinese prosecutors have proposed a new legal framework to combat crypto money laundering. An article on the Supreme People’s Procuratorate website suggests presuming criminal intent for users of crypto mixers and privacy coins, unless counter-evidence is provided. The proposal also calls for new evidence standards for blockchain data and a national platform to dispose of seized crypto, addressing challenges from China's ban on digital asset trading.
Prosecutorial framework proposal
- ▪An article on the website of China’s Supreme People’s Procuratorate (SPP) proposes a new legal framework for prosecuting crypto money laundering
- ▪The proposal was written by two district prosecutors in Hunan province and a university law professor
- ▪The authors argue China's current legal framework has created a "triple dilemma" in defining offenses, obtaining evidence, and recovering stolen assets
- ▪The proposal is not legally binding but offers insight into the thinking of China's prosecution system
- ▪The proposal advocates for a "double investigation of one case" rule, requiring investigators to screen every underlying crime for money laundering
Crypto mixer presumption rules
- ▪Suspects can rebut the presumption of intent if they provide "reasonable counter-evidence" for using privacy tools
- ▪The proposal suggests that using crypto mixers or privacy coins should be legally presumed to indicate money laundering intent
- ▪Other proposed indicators of money laundering include moving large amounts of crypto suspiciously or frequent, high-value transfers through anonymous wallets
Blockchain evidence standards
- ▪Reports from compliant blockchain analytics firms would be admissible as expert evidence under the proposal
- ▪The framework proposes a "blockchain data self-verification" principle, where verifiable on-chain records are treated as presumptively genuine
Seized cryptocurrency disposal
- ▪The proposal addresses the problem that Chinese authorities have no clear legal way to liquidate seized crypto due to the country's ban on trading
- ▪The article calls for a national platform to manage and sell seized cryptocurrency through compliant channels like directed auctions
Chinese money laundering scale
- ▪According to Chainalysis, Chinese-language networks processed an estimated $16 billion in 2025 and handle roughly 20% of all crypto money laundering worldwide
- ▪China's prosecution system charged more than 3,000 people with crypto-related money laundering in 2024
- ▪China outlawed cryptocurrency trading and mining in 2021
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