Author | Wu Talks Blockchain
On the morning of August 19, the Supreme People's Court and the Supreme People's Procuratorate jointly held a press conference to release the "Interpretation on Several Issues Concerning the Application of Law in Handling Criminal Cases of Money Laundering" (hereinafter referred to as the "Interpretation"). The "Interpretation" will come into effect on August 20, 2024.
It is mentioned that the Interpretation lists "virtual asset" transactions as one of the ways of money laundering. It is clear that the transfer and conversion of criminal proceeds and their benefits through "virtual asset" transactions and financial asset exchanges can be identified as "covering up and concealing the source and nature of criminal proceeds and their benefits by other means" as stipulated in Article 191, Paragraph 1, Item 5 of the Criminal Law.
"This is the first time that the Supreme People's Court and the Supreme People's Procuratorate have listed virtual asset transactions as a method of money laundering, and the term virtual asset transactions also appears in a judicial interpretation for the first time," Liu Yang, partner of Beijing Deheng Law Firm, told the China Times.
Chen Xueyong, deputy director of the Third Criminal Division of the Supreme People's Court, told reporters including the China Times that with the widespread application of Internet technology, money laundering methods have been constantly updated and upgraded. Virtual currency, game currency, "running point platform", live broadcast rewards, etc. have become new money laundering carriers and methods, showing more complex and hidden "network" and "chain" characteristics. Chen Hongxiang, director of the Third Criminal Division of the Supreme People's Court, said that the people's courts will severely punish money laundering crimes in accordance with the law, and increase the crackdown on money laundering crimes involving underground banks and money laundering crimes using virtual currency and game currency. Chen Xueyong said that underground banks have become the main channel for criminals to engage in money laundering and transfer funds. At present, new types of underground banks have also emerged. Upstream criminals use virtual currency and game currency to transfer assets across borders through underground banks. The amount involved is high and it is difficult to investigate and deal with it, which puts forward new and higher requirements for combating money laundering crimes.
Yan Lixin, executive director of the China Anti-Money Laundering Research Center, told the Daily Economic News that from a judicial perspective, the use of "virtual assets" to transfer and convert criminal proceeds and their proceeds is clearly listed as a method of money laundering, providing a clear legal basis for law enforcement agencies, helping to more accurately identify and combat money laundering involving virtual assets, more effectively track and monitor the cross-border flow of virtual assets, promote cross-border regulatory cooperation, and jointly combat cross-border money laundering crimes.
Luo Chunlei, a lawyer at Shanghai Guangming Law Firm, told the Daily Economic News that when virtual currency transactions are used to cover up and conceal the source and nature of criminal proceeds and the income generated, the act constitutes money laundering. This includes converting criminal proceeds into virtual currency, or converting virtual currency into other forms of assets to evade legal investigation.
Lawyer Shao Shiwei pointed out that Article 5 of the published "Interpretation" lists "virtual asset" transactions as one of the ways to conceal money laundering in seven upstream crimes. At the same time, Article 6 also clarifies the handling method of conflicting laws: if both money laundering and concealment are constituted, the more serious money laundering crime will be convicted and punished. (The statutory penalty for concealment is divided into two levels: less than 3 years and 3-7 years)
She said that from now on, it will be more difficult for U merchants to do business, and ordinary people may face great legal risks if they occasionally want to sell coins. If you receive stolen money when buying and selling virtual currencies, it depends on the nature of the stolen money. If the source of the funds received is the 7 types of upstream crimes stipulated in the crime of money laundering, it is a crime of money laundering. If the source of the funds received is a crime other than the 7 types of upstream crimes stipulated in the crime of money laundering, it is a crime of concealment. The release of the "Interpretation" means that my country has taken more stringent measures to combat money laundering crimes and has included virtual currency transactions in the scope of supervision and legal regulation. The release of the "Interpretation" reminds U merchants and ordinary people to be more cautious in the process of virtual currency transactions, ensure the legality of the transactions, and avoid inadvertently participating in illegal activities such as money laundering.
Lawyer Liu Yang said that the connotation of "virtual assets" is greater than "virtual currency". It is worth pointing out that the new judicial interpretation of the crime of money laundering has added this expression, which does not mean that the property attributes of "virtual assets" have been clarified, but only the trading behavior of "virtual assets" has been included. Of course, even if the new judicial interpretation has not been issued, the defense view that virtual currency does not have property will not be supported in the defense of the crime of money laundering.
Lawyer Liu Honglin said that virtual currency trading is not equal to money laundering, let alone a criminal offense. The issuance of the judicial interpretation by the two high courts this time is based on the fact that virtual currency is frequently used for money laundering crimes. In order to facilitate the judicial trial work in individual cases, a clear list is made, but this does not mean that all virtual currency trading behaviors in mainland China are money laundering. Secondly, the issuance of this judicial interpretation will not change the regulatory policy on virtual currency trading in mainland China. China's consistent policy on virtual currency trading is to strictly prohibit the development of virtual currency exchange business in China, and to strictly prohibit the development of virtual currency exchange business for mainland Chinese citizens. Hong Kong's compliant licensed exchanges have made it clear that mainland citizens cannot register to use their trading services. There is no clear prohibition or denial of the behavior of Chinese citizens holding and trading virtual currencies. The issuance of the judicial interpretation by the two high courts this time has not broken through this policy status quo.
A person from a grassroots court revealed to reporters that this is the area that the court is currently focusing on cracking down on. All cases are strictly tried and basically no suspended sentences are imposed. At most, related cases can account for 1/3 of the number of cases in the criminal courts of grassroots courts. At the same time, there are also problems such as difficulty in identifying money laundering methods and difficulty in determining the amount of crime. According to reports, the Supreme People's Procuratorate prosecuted 2,971 people for money laundering in 2023, which is nearly 20 times the number of people prosecuted for money laundering in 2019. In the first half of 2024, 1,391 people were prosecuted for money laundering, an increase of 28.4% year-on-year, continuing to maintain the trend of cracking down on money laundering crimes.
Reference Links
https://mp.weixin.qq.com/s/kwlAT7b69HgS5vJ0xgT0GQ
https://mp.weixin.qq.com/s/a7ZMKZ3IC_XYeT0o79ko6A
https://mp.weixin.qq.com/s/Q_tkKebLNSQDkhFDGQTewQ
