- Legal Shift: China has officially recognized virtual asset transactions as a method of money laundering, marking a significant legal development.
- Announcement: The Supreme People’s Court and the Supreme People’s Procuratorate, China’s highest judicial bodies, jointly made the announcement during a press conference.
- Implementation: The new measures, expected to take effect on Tuesday, are part of broader efforts to strengthen anti-money laundering laws, particularly targeting crypto.
On Monday, Chinese authorities made a landmark decision by explicitly recognizing “virtual asset” transactions as a method of money laundering. This marks the first instance in the country where such a classification has been made towards this asset class.
The Supreme People’s Court and the Supreme People’s Procuratorate, the highest judicial bodies in China, announced the new legal interpretation during a press conference. The measures are set to take effect on Tuesday and are part of a broader initiative aimed at tightening anti-money laundering laws across the country, with a specific focus on the use of crypto in illicit financial activities.
The updated legal interpretation classifies virtual asset transactions, including those conducted through cryptocurrency exchanges, as acts that “cover up and conceal the source and nature of the proceeds of crime.” This move follows China’s previous bans on Initial Coin Offerings (ICOs) in 2017 and on crypto transactions in 2021, illustrating the country’s evolving and often stringent approach to cryptocurrency regulation.
The decision reflects China’s continued effort to regulate and control the use of cryptocurrency within its borders, particularly in the context of preventing and prosecuting financial crimes. As the global regulatory landscape around crypto continues to evolve, China’s actions may set a precedent for other nations grappling with similar concerns.
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