Crypto is taking massive steps towards worldwide adoption. It has already been legalized in many countries and is actually making headway in many places. China, however, is not one of those places. The country is well-known for its anti-crypto stance, but now, it just upped its game.
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China already has a robust legal framework for anti-money laundering. On August 20, 2024, both of China’s highest judicial bodies, the Supreme People’s Court and the Supreme People’s Procuratorate, announced that they had finished up those AML laws.
China 🇨🇳 unbans crypto. What's the best meme for this?
— H.E. Justin Sun 孙宇晨(hiring) (@justinsuntron) August 18, 2024
Unfortunately for Crypto heads and crypto businesses in China, the new legal interpretation contained in the new update to the AML laws now classifies virtual asset transactions, including those conducted through crypto exchanges, as acts that are used to “cover up and conceal the source and nature of the proceeds of crime.”
Basically, If you’re using crypto, you must be a criminal hiding something illegal. But they also got specific.
According to the provisions of the new laws, Chinese authorities will now consider laundering amounts over 5 million yuan ($685,000) or causing a loss of more than 2.5 million yuan ($343,000) to be very grave cases.
These thresholds have been specifically set by the government to ensure that large-scale money laundering operations are scrutinized strictly and that harsher penalties are attached. The penalties for violations are no joke and are pretty substantial.
If anyone is convicted of any of these offences, they could face criminal detention, up to five years in prison, with the bonus of a minimum fine of 10,000 yuan ($1,370). Should the sentence be between five and ten years, the fine goes up to at least 200,000 Yuan ($27,400) with imprisonment.
This newest addition to China’s anti-crypto laws follows the country’s bans on Initial Coin Offerings (ICOs) in 2017 and cryptocurrency transactions in 2021. The country has been tough on money laundering in recent years. According to data released by the Supreme People’s Procuratorate, precisely 2,971 people were prosecuted for money laundering in 2023 alone.
That was 20% higher than the figures from 2019. This newest update to the anti-money laundering laws has been introduced to curb the increasing growth of money laundering in China. Hence, severe punishments are attached to the offences.
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Of course, the updates to the AML laws are well-intentioned, but they have also caused many to believe that China is tightening its stand against crypto and will not be budging anytime soon. In contrast, crypto is seeing more widespread adoption in the US, especially when it comes to US presidential candidate Donald Trump.
In a campaign event held in New York on Monday, Trump noted that it is important that the US stay well ahead of the Chinese in technological advancements. With a new law like the updates to the AML regulations, China has given the US a good headstart in the crypto race.
HODL Team
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