China Loosens The Net For Money Laundering
The major legal development of China is that the Anti-Money Laundering (AML) laws have amended the law to the effect that they are virtual asset transactions. It is, indeed, the first full-scale amendment of the AML law of the nation since its implementation on January 1, 2007. The new official legal explanation, released in August by the People’s Court of People and the People’s Procuratorate, is that virtual assets are now regarded as potential means of laundering.
Offenders May Face Fine of 28,000 Dollars
The improved rules close an essential loophole in the law that outlaws the “activity of intentionally disguising illegal proceeds and income obtained through the activities in another way.” In fact, such a change is part of the broader efforts of China towards regulating the fast-paced entry of digital currencies and other virtual assets.
According to the new laws, the ones that get caught doing exactly that will be punished with either fines or prison sentences. The fine could be anything from 10,000 RMB (approximately 1,400 US dollars) to 200,000 RMB (approximately 28,000 US dollars) according to the severity of the offense. In additions to fines, those proved guilty could be imprisoned for 5-10 years in most serious instances.
The amendments also entail the delineation of “serious conditions”, a category where one may include the some such as: not cooperating with the authorities or laundering the sums in excess of 5 million Chinese yuan (about 700,000 dollars).
These changes are evidence of China’s resolve to addressing various forms of financial crime, including those that are paired with digital money. According to the People’s Procuratorate of China, for the year 2023, 2,971 individuals were prosecuted for money laundering. This is a twenty-fold increase as compared to 2019. This wave of prosecution is a major polish on the very surface of the issue, demonstrating that this crime is not only still a threat but is in fact becoming more and more frequent, hence the necessary toughening of legal systems.
Speculations about the possible lifting of the cryptocurrency ban
This move has led to the spread of rumors within the industry as to whether China is having second thoughts about prohibiting the commodification of digital currency. It is suggested that the new changes could pave the way to a more lenient policy, thus ending the country’s rigid stand on cryptocurrency trade.
The juices started flowing in the middle of July, when Mike Novogratz, CEO of Galaxy Digital, shared on his social networks his vision that China might soon lift its Bitcoin ban by the end of 2024. In his publication, he also suggested that the ban would be lifted. This was later taken down, but people still had many questions about it. Justin Sun, co-founder of Tron and Huobi, aside from the abovementioned comments made by Mike Novogratz, wrote his own enigma on social media on August 19, teasing users who showed a meme that is indicative of the potential unbanning of cryptocoin by China.
Still, among the technical experts in this domain, we can see it. Yifan says, on the one hand, that the country is ill-disposed to its dwellers’ trading Bitcoin for RMB.
The nation’s unique link with the digital form of money has been marked by the introduction of limitations in different aspects. The enforcement of crypto exchanges in 2017 and a wider crackdown on the crypto sector during 2021 are among the strict measures the country has employed. It has also been informed that Qingdao police are in the processing of prosecuting a case involving a $1.104 million subjection of dollars through the Tether (USDT) stablecoin.
