The Supreme People's Procuratorate of China has published a new package of guidelines aimed at fundamentally changing approaches to investigating crimes related to money laundering through cryptocurrencies. This move is not just another bureaucratic initiative, but a systematic attempt to close legal loopholes that have been exploited by criminals in the digital space for decades.

Closing Legal Loopholes

Prosecutors directly pointed out a fundamental mismatch between blockchain technology and current legislation. Until now, most cases involving digital assets were classified under the relatively lenient charge of "concealment of criminal proceeds." Now, a shift to a stricter classification—money laundering—is proposed. To this end, the principle of "one case, two reviews" is being introduced, requiring investigators to look for signs of money laundering when investigating any primary crime.

New Rules: Presumption of Guilt and Shift in Burden of Proof

The most controversial innovation is the change in evidentiary standards. The agency plans to simplify court proceedings through the following measures:

  • Blockchain Self-Identification: Data from public network explorers will be considered reliable by default if the hash information matches. This deprives the defense of the ability to endlessly challenge obvious transactions.
  • Shift in Burden of Proof: If the prosecutor provides a transaction chain analysis report, the defense will now have to prove the contrary. This fundamentally changes the balance of power in judicial proceedings.
  • Presumption of Guilt: The use of crypto mixers, privacy coins (e.g., Monero), or selling assets at non-market prices is automatically considered sufficient grounds to establish intent for money laundering. In effect, this criminalizes tools of financial privacy.

Confiscation and International Control

The Procuratorate acknowledged a serious problem: due to the complete ban on cryptocurrency circulation in the PRC, authorities have no legal channels to sell confiscated assets. The solution is to create a state platform for storing and valuing coins, where a special committee of experts will assess their value based on blockchain data and quotes from international exchanges. Additionally, China intends to initiate the creation of global protocols for tracking and freezing crypto assets within the framework of cross-border judicial cooperation.

My Expert Commentary: This step by Beijing is a logical continuation of the policy of total control over the financial system. Unlike the United States, which recently recognized the right of law-abiding users to privacy in mixers, China is moving towards the complete criminalization of any anonymity tools. For the market, this means that the PRC jurisdiction is finally becoming a "gray zone" for DeFi and privacy protocols, and international cooperation in this area will be built exclusively on Beijing's terms.