Chinese prosecutors have launched a major initiative that could fundamentally change the approach to combating financial crimes in the cryptocurrency sector. In an analytical document published on the official website of the Supreme People's Procuratorate of the People's Republic of China, it is proposed to consider the use of crypto mixers and privacy coins as a direct indication of intent to launder money. This step signals the authorities' intention to tighten control over digital assets and elevate the fight against them to a new, more technologically advanced level.
Three Key Indicators of Criminal Intent
The authors of the document propose introducing a clear system of circumstantial evidence that, taken together, can serve as grounds for prosecution. The first and most important point is the use of services specifically designed to conceal transactions — crypto mixers and privacy coins. The second indicator is described as "rapid disposal of large amounts of cryptocurrency at a clearly non-market price or in a strange manner." The third is the frequent execution of large transactions through anonymous wallets not linked to a person's public identity, where the individual cannot explain the origin of the funds. According to the prosecutors' plan, when these indicators are present, the burden of proof shifts to the accused: if they do not provide reasonable arguments in their defense, their guilt will be presumed.
New Standard of Evidence: Blockchain as a Witness
Special attention in the document is given to the issue of collecting and verifying evidence under conditions of anonymity and the cross-border nature of cryptocurrencies. The prosecutors propose applying the principle of "self-verification of blockchain data." Its essence is that if a blockchain record can be verified through a public explorer and its hash is immutable, its authenticity can be "provisionally recognized," with the burden of refutation falling on the defense. Additionally, it is proposed to establish the status of reports from specialized blockchain analysis companies (e.g., fund flow patterns and analysis of address links) as expert opinions. This would allow them to be used in court as full-fledged evidence.
The authors separately address the issue of recovering digital assets. They acknowledge significant difficulties related to the legal nature of cryptocurrencies, procedural gaps, and barriers to cross-border cooperation. The proposed solution is to create a unified national mechanism, including standards for asset seizure, storage, valuation, and disposal, as well as a national platform for their storage and sale through legal channels.
Expert opinion from Cryptalist: This initiative is not just a tightening of rules but a fundamental paradigm shift. China is effectively proposing a new global standard: if you use tools to enhance privacy, you automatically fall under suspicion. For the market, this means increased pressure on all anonymous protocols and services. Investors and developers working with privacy coins and mixers should prepare for their activities to be viewed through the lens of a presumption of guilt. This could mark the beginning of a global trend that will force the industry to seek more compromise solutions at the intersection of privacy and regulatory compliance.