China issues amendments to anti-money laundering laws for cryptocurrencies

During 2021, China imposed a comprehensive ban on the use of cryptocurrencies. However, due to the continuous development of technology and the decentralized nature of cryptocurrencies, mainland Chinese users still find innovative ways to access the cryptocurrency market.

According to information from local media, Prime Minister Li Qiang chaired an executive meeting of the State Council on January 22 to discuss the revised anti-money laundering (AML) law. The first draft amendments to the country's AML regulations were proposed in 2021, and are expected to be signed into law in 2025. This will be the first significant amendment to the AML regulations. China's AML since 2007. Scholars and financial experts participating in discussions on the draft AML amendments said that the scope of the AML law is relatively broad, making it difficult for the draft to ensure comprehensiveness. Only the most urgent content can be prioritized for reflection in the initial stages.
Professor Wang Tan of Beijing Law University, a panelist, emphasized the need to address issues related to money laundering with cryptocurrencies from a legal perspective. He also said that the use of cryptocurrencies and digital assets for money laundering has gradually become mainstream, while China's current law lacks a clear definition of digital assets. Professor Vuong noted that although the draft includes preventing money laundering of digital assets, it still lacks specific instructions on confiscating assets from money laundering criminals, leading to a "disconnect".
He believes that improvements are still needed to improve the effectiveness of preventing money laundering related to digital assets. Although China has imposed a comprehensive ban on the use of cryptocurrencies in 2021 and banned all forms of mining, with the continuous development of technology and the decentralized nature of cryptocurrencies , mainland users have found ways to access the cryptocurrency market, leading to money laundering risks. The new revised regulations aim to impose stricter guidelines to limit such activities. Overall, the development of the cryptocurrency industry in China is posing many challenges in managing and controlling cryptocurrency-related activities. User creativity and flexibility have created new challenges for Chinese authorities in establishing and enforcing regulations related to cryptocurrency and money laundering. Amending AML laws can be seen as a positive step in meeting these challenges, however, effective enforcement and monitoring are critical to the success of these measures.
In fact, monitoring and controlling cryptocurrency-related activities is not just a Chinese problem but also a global challenge. International cooperation and information sharing between countries will play an important role in solving the problem of money laundering related to cryptocurrencies. At the same time, building a flexible and effective legal system to monitor and control these activities is also a key factor in protecting the global financial system from potential risks from cryptocurrency industry.
Amid the constant development of technology and the decentralized nature of cryptocurrencies, monitoring and controlling activities related to cryptocurrencies will continue to be a major challenge for governments. globally. Establishing and enforcing regulations related to cryptocurrencies and money laundering will require close cooperation and flexible measures on the part of government, industry and the international community.