China's new legal interpretation targets virtual assets to combat money laundering, imposing stricter thresholds and prosecution guidelines.
New guidelines classify virtual asset transactions as hiding criminal funds, with increased prosecutions for severe money laundering cases.
$2 billion in Ethereum linked to the Plus Token Ponzi scheme was recently seized, raising speculation about China's crypto liquidation efforts.
China has published a new judicial interpretation explicitly extending anti-money laundering requirements to virtual assets with effect from 20 August 2024. Meanwhile, to close some legal loopholes, the Supreme People's Procuratorate and Supreme People's Court have implemented tough measures dealing with money laundering crimes that use virtual assets as camouflage.
The interpretation tightens rules by considering transactions involving virtual assets as a way to hide illicit gains. This action demonstrates China's resolve to combat contemporary financial crimes and limit the growth of the virtual asset market.
https://twitter.com/WuBlockchain/status/1825539739442876720 Stricter Thresholds and Increased Prosecutions
The new guidelines define virtual asset transactions as acts of “suppressing and hiding the source” of criminal funds. Additionally, the guidelines establish what qualifies as ‘serious circumstances’ in money laundering cases, such as laundering over 5 million yuan or causing losses exceeding 2.5 million yuan. By setting these thresholds, China aims to deter and punish severe financial crimes more effectively.
In 2023, the Supreme People's Procuratorate handled about 3,000 cases involving money laundering, a 20-fold increase from 2019. This is only one example of how the Procuratorate has increased its prosecutions. China's escalating crackdown on financial crimes is reflected in this jump in prosecutions, which rose by 28.4% in the first half of 2024 alone.
Speculation Surrounds $2 Billion in Seized Ethereum
Furthermore, the Ministry of Public Security, the National Supervisory Commission, and the Supreme People's Procuratorate collaborate across many agencies, which is strengthened by the new interpretation.
Fighting corruption and money laundering has been made possible in large part by this cooperative approach. The recommendations provide additional clarification on concurrent punishments when money laundering is coupled with other offences by extending the definitions of "self-laundering" and "money laundering by others."
In related news, government-seized wallets containing $2 billion worth of Ethereum connected to the notorious Plus Token Ponzi scheme were recently transferred. This action has increased conjecture that the Chinese government is trying to liquidate the crypto holdings that it has seized. Amidst China's financial crime crackdown, a substantial amount of cryptocurrency was seized from the Plus Token scam, which is among the biggest cryptocurrency Ponzi schemes.
The post China Takes Tough Stance on Crypto: New Rules Aim to Fight Money Laundering with Virtual Assets appeared first on Crypto News Land.
