The decentralized nature of cryptocurrency and other technical developments have allowed mainland users to circumvent China’s 2021 crypto ban and participate in the cryptocurrency market.
There have been demands for Chinese lawmakers to pay more attention to the emerging cryptocurrency business, and the government is planning to respond by significantly updating its Anti-Money Laundering (AML) rules to include transactions using cryptocurrencies.
Local media reported that on January 22, Prime Minister Li Qiang presided over a State Council executive meeting when the updated anti-money-laundering legislation was discussed. The country’s anti-money-laundering legislation were first suggested in 2021 and then changed in 2023, 2024, and 2025. By 2025, they will have been signed into law. Revisions to China’s anti-money-laundering laws have not been this substantial since 2007.
During the debates around the updated AML legislation, prominent academics and financial specialists voiced their concern that the law’s expansive breadth made it impossible for the draft to cover all bases. Prioritizing the most pressing material requires first reflecting it in a framework.
During the conversation, Wang Xin, a law professor at Peking University, emphasized the critical need of finding legal solutions to the problems associated with crypto money laundering. According to Xin, there is no clear definition of digital assets in Chinese law at the moment, and the use of cryptocurrencies and other digital assets for money laundering is becoming more common.
The professor pointed out that although the updated version addresses the issue of digital asset money laundering, there is still no clear operational direction for the further steps to take when assets involved in money laundering are seized, frozen, deducted, or confiscated, leading to a “disconnect.” Additionally, he said that there is potential for further advancement in the fight against money laundering using digital assets.
China outlawed bitcoin mining in all its forms and off-shore exchanges were barred from providing services in 2021. Money laundering concerns have arisen, but, as a result of technical developments and the decentralized character of cryptocurrencies, mainland users have discovered methods to enter the crypto market. The goal of the revised rules is to put more stringent rules in place to limit these kinds of actions.
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