The Chinese government has issued a new anti-money laundering law to ‘regulate’ fintech

Chinese lawmakers are already considering reforming anti-counterfeiting laws and increasing the ability to “track” money laundering through emerging financial technologies – including cryptocurrencies.

According to a statement translated from the South China Morning Post, Legislative Affairs Commission spokesman Wang Xiang announced the reforms on September 9 – citing the need to improve detection methods amid the “rapid development of new technologies”.

The new proposed legislation calls for central banks and financial regulators to collaborate on guidelines to tackle concerns that counterfeiting technology is still in its infancy.

Wang pointed out that financial institutions will be responsible for assessing the risks of money laundering caused by new business models created by technology.

Related: Hong Kong Considers New Licensing System for OTC Crypto Trading

The Supreme People's Court expands the definition of financial declaration methods

In the year On August 19, the Supreme People's Court – the highest court in China – announced that virtual assets are a potential means of money laundering and tax evasion. According to the court decision:

“Virtual assets, transactions, methods of financial asset exchange, transfer and conversion of criminal proceeds can be considered as means of concealing the source and source of the proceeds of crime.”

Laundering of more than 5 million yuan ($705,000) by repeat offenders or with a financial loss of 2.5 million yuan ($352,000) or more will be considered a “serious conspiracy” and will attract harsher penalties, the ruling said.

China's hostility to cryptocurrencies and virtual assets

The Chinese government's aversion to digital assets is well documented. In the year In 2017, Beijing's market regulator required all virtual asset exchanges to shut down services in the country.

Government action that followed included foreign digital asset exchanges such as Coinbase – which were forced to stop offering services in the country. Additionally, this caused the price of Bitcoin (BTC) to drop to $3,000.

Later, in In 2021, the Chinese government began to post a new focus on cryptocurrencies, targeting cryptocurrency operations in the country.

The initiative calls for inter-departmental cooperation between the People's Bank of China (PBOC), the Cyberspace Administration of China and the Ministry of Public Security.

Magazine: How Chinese traders and miners are getting around China's crypto ban