Chinese Government Considers Enacting AntiMoney Laundering Legislation to Supervise Emerging Fintech Sector

Chinese lawmakers are considering revising an earlier anti-money laundering law to enhance capabilities to “monitor” and analyze money laundering risks through emerging financial technologies — including cryptocurrencies.
According to a translated
statement
from the South China Morning Post, Legislative Affairs Commission spokesperson Wang Xiang announced the revisions on Sept. 9—citing the need to improve detection methods amid the “rapid development of new technologies.”
The newly proposed legal provisions also call on the central bank and financial regulators to collaborate on guidelines to manage the risks posed by perceived money laundering threats from nascent technologies.
Wang noted that financial institutions would likewise be held accountable for assessing money laundering risks posed by novel business models arising from emerging tech.
Related:
Hong Kong considers new licensing regime for OTC crypto trading
The Supreme People’s Court expands the definition of money laundering channels
On Aug. 19, the Supreme People’s Court — the highest court in China — announced that virtual assets were potential
methods to launder money
and avoid taxation. According to the court
ruling
:
The ruling also stipulated that money laundering in amounts over 5 million yuan ($705,000) committed by repeat offenders or caused 2.5 million yuan ($352,000) or more in monetary losses would be deemed a “serious plot” and punished more severely.
China’s hostility toward cryptocurrencies and virtual assets
China’s government has a well-documented hostility toward digital assets. In 2017, a Beijing market regulator required all virtual asset exchanges to
shut down services
inside the country.
The ensuing government crackdown included foreign digital asset exchanges like Coinbase — which were forced to stop providing services in the country. Additionally, this caused Bitcoin’s (
BTC
) price to plummet to
lows of $3,000
.
Later, in 2021, the Chinese government began more aggressive posturing toward cryptocurrencies through a renewed focus on targetting cryptocurrency operations within the country.
This initiative called for
inter-departmental collaboration
between the People’s Bank of China (PBoC), the Cyberspace Administration of China, and the Ministry of Public Security to discourage and prevent the use of crypto.
Magazine:
How Chinese traders and miners get around China’s crypto ban