China Proposes Revised Crypto AML Regulations

China had a discussion recently about including cryptocurrency transactions under proposed revisions to longstanding anti-money laundering regulations. The changes aim to limit financial crimes tied to digital assets amid their swelling adoption despite Beijing’s trading ban.

According to state media outlets, China’s cabinet proposed adding crypto-related amendments during recent policy talks. The yet-unfinished updates mark the national anti-laundering guidelines’ first overhaul since 2007.

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Participants stressed the urgent need to formally address surging money laundering risks as crypto assets gain legitimacy worldwide, even as China prohibits trading. One legal expert said current statutes fail to properly define digital currencies and ownership rights.

China’s proposed rules include strategies to confiscate funds

The proposed amendments outline strategies to confiscate laundered funds derived from cryptocurrency crimes. However, policy researchers noted that work remains to flesh out enforcement frameworks for asset seizures and prosecutions under the coming codes.

Despite banning crypto trading and mining since 2021, China still grapples with mainland residents accessing offshore exchange platforms unregulated domestically. The revised anti-laundering provisions seek to close oversight gaps exposed by crypto investment demand surging globally faster than regulations can keep pace.

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However, China treads cautiously, crafting restrictive policies that avoid hindering technology innovation in surrounding regions and are unlikely to abandon burgeoning digital finance activity. For now, tweaked anti-laundering laws keep tighter leashes on cryptocurrency flows deemed illicit by the ruling communist regime.