Updates to Anti-Money Laundering Law in China Targets New Fintech, Crypto
Chinese lawmakers are considering changes to the country’s anti-money laundering laws in a bid to keep up with the increasing money laundering using new financial technologies, including cryptocurrencies.
Legislators cite the rising risks:
Wang Xiang, the spokesperson of the Legislative Affairs Commission, announced the planned amendment to the law on September 9, with an explanation that the detection methods need more development as new technologies have been emerging at a breakneck speed. This set of amendments would grant the government an even better capacity in monitoring and analyzing information about potential risks related to fintech innovation.
Interagency Coordination
The new regulations have also demanded more profound coordination between China’s central bank, financial regulators, and other institutions. Financial institutions will be expected to investigate and curb money laundering risks associated with new business models resulting from the technologies.
Supreme Court Names Virtual Assets as Risk
In August 2024, the Supreme People’s Court named virtual assets as one of several tools that could be used in money laundering. The ruling had much emphasis on virtual asset transactions’ ability to disguise illegal sources of funds. The revised law also has heavier sentences for offenders found to have laundered over 5 million yuan or those who have resulted in a huge financial loss.
History of Crypto Crackdown in China
China has always been hostile towards digital currencies. Since 2017, crypto exchanges and transactions have repeatedly been targeted by the relevant authorities, leading to forcing digital asset platforms to leave the country and throttling cryptocurrency use by choking regulations. The government took further steps in the succeeding year, 2021, by working with a raft of agencies to totally root out domestic cryptocurrency operations.
These changes in the proposed AML law have, therefore, been touted to be part of China’s ever-relenting effort at further streamlining financial technology and protecting against crime.
