The Supreme People's Procuratorate of China has issued new recommendations that fundamentally change the approach to combating money laundering through cryptocurrencies. The agency proposes updating evidentiary standards and eliminating legal loopholes that allowed criminals to evade responsibility. This signals that Beijing intends to close the issue of anonymous transactions once and for all.
New Classification: From Concealment to Laundering
Prosecutors directly point out the discrepancy between blockchain technology and current legislation. Most cases involving crypto assets today are prosecuted under the article "concealment of criminal proceeds," which, in their view, is too lenient. They propose applying a stricter article—money laundering. To this end, the principle of "one case, two checks" is introduced: investigators are required to look for signs of money laundering when investigating any underlying crime.
Three Key Changes in Evidence
Chinese authorities plan to significantly simplify the handling of evidence in court. The main initiatives include:
- Blockchain Self-Identification: information from public network explorers is considered reliable by default if the hash data matches. This eliminates the need for additional expert examinations.
- Shift in Burden of Proof: if the prosecutor provides a transaction chain analysis report, the defense must prove the contrary. This represents a significant shift towards the prosecution.
- Presumption of Guilt: the use of mixers, privacy coins (e.g., Monero), or selling assets at non-market prices is automatically considered sufficient grounds to establish intent for money laundering. This effectively criminalizes privacy tools.
Confiscation and International Cooperation
The Procuratorate acknowledges difficulties in seizing cryptocurrencies: due to the complete ban on their circulation in the PRC, authorities have no legal channels to dispose of confiscated assets. The solution will be the creation of a state platform for storing and appraising seized coins. Valuation will be conducted by a special committee of experts based on blockchain data and prices from international exchanges.
Furthermore, China intends to initiate the creation of international protocols for tracking and freezing crypto assets within the framework of judicial cooperation with other countries. This is an important step, given that transactions do not recognize borders.
My Expert Analysis: China is consistently moving towards the complete elimination of anonymity in the crypto space. If these recommendations are adopted, the use of mixers and privacy coins in the PRC will become not just a violation, but direct evidence of criminal intent. This will create a dangerous precedent for other jurisdictions that may follow suit, ultimately blurring the line between financial privacy and money laundering.