China Cracks Down on Crypto Money Laundering with New Investigation Guidelines

China's Supreme People's Procuratorate has issued recommendations to reshape how the country investigates and prosecutes cryptocurrency-related money laundering. The proposals, published in the official Procuratorial Daily, aim to address a gap between China's Anti-Money Laundering Law and Article 191 of the Criminal Law. The authors argue that the decentralized nature of virtual currencies has outpaced China's legal framework, creating a three-part problem: defining the offense, gathering evidence, and recovering stolen assets.

The recommendations include treating the use of mixers and privacy coins as evidence of criminal intent. They also propose a 'one case, two checks' principle that would require investigators to look for laundering indicators in every major criminal probe. Additionally, they suggest shifting the burden of proof from prosecutors to defendants once a transaction-chain analysis report is submitted.

The proposals arrive at a time when Chinese-language laundering networks processed $16.15 billion in 2025, about 20% of the global total, according to Chainalysis. In 2024, Chinese prosecutors brought charges against more than 3,000 people in crypto-related laundering cases.