Chinese legislators are currently contemplating the revision of an existing anti-money laundering law in order to strengthen their ability to “monitor” and assess the risks associated with money laundering, particularly in relation to emerging financial technologies such as cryptocurrencies.
A statement from Wang Xiang, a spokesperson for the Legislative Affairs Commission, revealed the proposed revisions on September 9th. The motivation behind these revisions is the need to enhance detection methods in response to the “rapid development of new technologies.”
The newly suggested legal provisions also emphasize the importance of collaboration between the central bank and financial regulators in order to establish guidelines for managing the perceived risks of money laundering posed by nascent technologies.
Wang emphasized that financial institutions would be held responsible for evaluating the money laundering risks associated with innovative business models that emerge as a result of advancements in technology.
In a recent ruling on August 19th, the Supreme People’s Court of China, the country’s highest court, declared that virtual assets could be used as a means to launder money and evade taxation. The ruling also specified that money laundering involving amounts exceeding 5 million yuan ($705,000) committed by repeat offenders or resulting in monetary losses of 2.5 million yuan ($352,000) or more would be considered a “serious plot” and subject to more severe punishment.
China’s government has long demonstrated a hostile stance towards cryptocurrencies and virtual assets. In 2017, a regulatory body in Beijing mandated the closure of all virtual asset exchanges operating within the country. Consequently, foreign digital asset exchanges like Coinbase were compelled to cease their services in China, causing the price of Bitcoin (BTC) to plummet to as low as $3,000.
In 2021, the Chinese government intensified its efforts to combat cryptocurrencies by targeting cryptocurrency operations within the country. This initiative involved collaboration between various departments, including the People’s Bank of China (PBoC), the Cyberspace Administration of China, and the Ministry of Public Security, with the aim of discouraging and preventing the use of cryptocurrencies.
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