China Cracks Down on Crypto, Classifies Transactions as Means for Money Laundering

China has intensified its crackdown on cryptocurrency, now classifying crypto transactions as money laundering under a new legal interpretation.

This move represents one of the strictest measures taken by the country against digital assets.

The Supreme People’s Court and the Supreme People’s Procuratorate have issued new guidelines that target various forms of money laundering, including those involving cryptocurrencies. These new rules establish clear legal repercussions for those using digital currencies to mask illicit funds.

Under the updated regulations, anyone involved in using crypto to hide the origins of illegal money will face severe penalties. The guidelines make it clear that claiming ignorance will not be accepted as a defense. Courts will evaluate the knowledge and handling of funds based on transaction details and the overall context of the activities.

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Significant thresholds have been set, with transactions involving over 5 million RMB in laundered funds being considered especially severe. Failure to cooperate or causing major financial harm will lead to hefty fines and possible imprisonment.

The guidelines also cover various methods of laundering money through crypto, including using it in pawn shops, risky investments, or cash concealment in retail and entertainment venues. Both individuals and organizations found guilty of such activities will face substantial fines and legal consequences.

For those who come forward and assist in recovering the laundered funds, there may be an opportunity for a reduced sentence, provided the crime is considered minor. Convictions will result in significant financial penalties, ranging from 10,000 RMB to 200,000 RMB, with the possibility of lengthy prison terms.

Alexander Stefanov