Chinese prosecutors have proposed a new legal doctrine: crypto mixers as a marker of money laundering.
China's legal system is preparing for a major overhaul of its approach to combating cryptocurrency crimes. An analytical article published on the website of the Supreme People's Procuratorate of the People's Republic of China proposes radically simplifying the proof of intent for money laundering. The key idea is to use the use of crypto mixers and privacy coins as presumptive evidence. This means the burden of proving the legality of transactions could be shifted onto the accused.
The authors highlight three main indicators that, in their view, should point to criminal intent. The first and most obvious is the use of tools specifically designed to conceal transactions: mixers and anonymous cryptocurrencies. The second is the rapid dumping of large amounts of cryptocurrency at a "clearly non-market price or in a strange manner." The third indicator is frequent large-sum transactions through anonymous wallets unconnected to the owner's public identity, the origin of whose funds they cannot explain.
New Logic of Evidence
Particular attention is drawn to the proposal for building an evidence base. Prosecutors allow that a crime chain could be constructed solely from circumstantial evidence. If this evidence mutually corroborates each other and forms a closed logical chain, the fact of money laundering could be considered proven even without tracing every individual transaction. This fundamentally changes the rules of the game, given the anonymous and cross-border nature of cryptocurrencies.
To collect and verify evidence, the authors propose implementing the principle of "self-verification of blockchain data." If an on-chain record can be verified through a public explorer and its hash remains unchanged, its authenticity can be "preliminarily recognized," shifting the burden of refutation to the defense. Additionally, it is proposed to establish the status of reports from specialized blockchain analytics companies (fund flow diagrams, analysis of links between addresses) as expert opinions.
The Problem of Asset Recovery
A separate section is dedicated to the recovery of digital assets. Here, the authors acknowledge serious difficulties related to the legal nature of cryptocurrencies, gaps in procedures, and barriers to cross-border cooperation. They see the solution in creating a unified national mechanism, including standards for the seizure, storage, valuation, and realization of assets, as well as a national platform for their storage and sale through legal channels.
Expert Opinion: This proposal is not just a tightening of rules, but a fundamental shift in the legal paradigm. If adopted, China would create a precedent where the anonymizing technology itself (mixers, privacy coins) becomes de facto proof of guilt. For the industry, this is a signal: any service enhancing privacy in China will automatically be viewed as a tool for money laundering. The market should prepare for a new wave of regulatory pressure, where the burden of proof falls on the users, not the prosecution.