Chinese Authorities Recognize Crypto Laundering

On Monday, Chinese authorities explicitly recognized virtual asset' transactions as a method of money laundering. This marks the first instance in the country that such a move has been made towards the asset class.

The Supreme People's Court and the Supreme People's Procuratorate, the country's highest judicial bodies, jointly announced the changes during a press conference.

Tightening Anti-Money Laundering Laws

The measures, expected to take effect on Tuesday, are part of broader efforts to tighten anti-money laundering laws. These new regulations specifically target the use of crypto in illicit financial activities.

The new legal interpretation classifies virtual asset transactions, including those conducted through crypto exchanges, as acts that 'cover up and conceal the source and nature of the proceeds of crime.'

Stricter Legal Scrutiny

Chinese authorities will now consider laundering over 5 million yuan ($685,000) or causing losses of more than 2.5 million yuan ($343,000) for severe offenses under the law.

The thresholds ensure that large-scale money laundering operations face stricter legal scrutiny and harsher penalties. If convicted and sentenced to fixed-term imprisonment of up to five years or given criminal detention, individuals face a fine of no less than 10,000 yuan ($1,370).

Harsher Penalties for High Offenses

For sentences ranging from five to ten years, the individual will be fined at least 200,000 yuan ($27,400) in addition to imprisonment.

This move comes after the country's bans on ICOs in 2017 and crypto transactions in 2021, highlighting China's fluctuating approach to crypto.

' The thresholds ensure large-scale money laundering operations face stricter legal scrutiny and harsher penalties.'

Global Reactions and Future Implications

Speaking at a campaign event at Precision Components Group on Monday in York, Pa., former President Donald Trump stressed the importance of the U.S. remaining ahead of Chinese technological advancements.

"To power our country into the future, including the growing electricity demands of AI and cryptocurrencies -- which is a vast subject coming up more and more -- we have to stay at the top; we wanna be right at the forefront," Trump said. "Otherwise, China and other countries will take it over."

The new measures from Chinese authorities represent a significant step in the global effort to combat money laundering through virtual assets.

As countries around the world grapple with the challenges and opportunities presented by cryptocurrencies, regulators and industry participants alike will closely watch China's actions.