China on the front lines: Crypto in the crosshairs of the fight against money laundering

As calls for greater control of the cryptocurrency industry multiply, China, despite its persistent ban on crypto transactions, is preparing a major review of its anti-money laundering regulations. Crucial adjustments discussed within the Chinese government signal the first significant revision since 2007. Faced with the global rise of cryptocurrencies, Chinese authorities are mobilizing to plug holes in their defense against money laundering, underscoring the imperative to ‘immediate action.

Crypto: China strengthens its fight against money laundering

China, which has just suffered a loss of 6,000 billion dollars on the stock market, plans to revisit its anti-money laundering laws to include digital assets. The proposed changes, recently discussed by the Chinese cabinet, constitute the first major overhaul since 2007. As global adoption of cryptocurrencies continues to rise, even despite the Chinese ban, authorities are seeking to fill gaps in the fight against money laundering, highlighting the urgency of official action.

Responding to calls for stricter oversight of the burgeoning cryptocurrency industry, China is preparing for a significant overhaul of its anti-money laundering (AML) regulations. »

On January 22, 2024, Premier Li Qiang led an executive meeting of the Council of State to examine the revised draft of the anti-money laundering law. The changes, although not finalized, reflect China’s efforts to adapt to the evolution of financial technologies. With money laundering and terrorist financing becoming more sophisticated and global, China wants to strengthen its defenses against these crimes, even in the context of a national ban on crypto transactions.

The rapid development of technology provides criminals with new opportunities for financial abuse, especially with the advent of virtual currencies like bitcoin (BTC) and ethereum (ETH). The first major revision since 2007 highlights the growing importance of cryptocurrencies in the global financial landscape. However, these changes are not without challenges. Legal experts have stressed the need to clearly redefine digital currencies and property rights in the context of evolving anti-money laundering laws.

The process of revising the anti-money laundering law is relatively arduous. The first revised draft of 2021 was publicly requested for opinion; in 2023, the revised draft was included in the legislative work plan of the State Council for the same year. The legislative plan of the Standing Committee of the 14e National People’s Congress finds that the Anti-Money Laundering (Review) Law is listed as a relatively mature bill and will be submitted for consideration during the legislature. According to the legislative plan, the revised draft should be adopted in 2025. », Specifies Wang Xin, professor at the Faculty of Law of Peking University and a major player in this revision.

China on alert: Cryptocurrencies threaten financial security

China, already in a posture of distrust towards cryptocurrencies, is intensifying its fight against money laundering. A threat that hovers over financial stability, because despite the ban on crypto transactions, the country is seeing a growing adoption of these digital assets.

China is working to plug loopholes in its system, aware that money laundering is evolving and finding refuge in new channels, jeopardizing national financial security. Its membership of the Financial Action Task Force (FATF) in 2007 is proof of this. And at the same time, thecall for demonstrations from specific non-financial institutions will intensify this struggle.

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