China’s Supreme People’s Procuratorate has published plans that will change the way the country handles and prosecutes cryptocurrency-related transactions, including a plan to treat mixed transactions with private funds as evidence of criminal intent.
This article, release in the Procuratorial Daily, was written by two prosecutors from Yuhu County in Hunan Province and a law professor at Xiangtan University.
The authors argue that money laundering, fraud, and border fraud have exceeded China’s laws and created a three-stage problem: clarifying the case, gathering evidence, and returning the stolen goods.
At the heart of the debate is a difference between the laws. China’s Anti-Money Laundering Law has said they lowered the restrictions on which predicate offenses are applicable, but Article 191 of the Criminal Law is still limited spending money salary in seven categories.
As a result, most crypto crimes fall under Article 312, which covers the concealment of criminal proceeds, a crime that the authors describe as a whole fish. He wants a broader application of the money laundering statute and a “one case, two checks” principle that would require investigators to look for signs of theft in every major investigation.
A heavy shift in China’s courts
Three ideas stand out. The first, described as blockchain self-verification, can treat on-chain records from public investigators as trustworthy when the hash values match, establishing their integrity.
The second could be tampering with the evidence: when prosecutors present an investigative report about the incident, the defense must object.
The third would allow the courts to assume that they are guilty of their own actions. Under that standard, the use of secret ingredients or funds, the sale of large quantities of goods at prices outside the market, or the operation of high value through unknown wallets without a clear source can establish a purpose unless the defendant imposes an appropriate penalty.
The authors also describe a collection of evidence, noting that hybrids, private currencies, and decentralized exchanges allow for multi-level distribution and chain transfers that traditional methods struggle to track.
It provides flexible electronic regulations, authentication standards, and clear authorization of technical measures such as real-time monitoring and traffic analysis, with limits for protecting personal information and cyber security.
Repatriation presents another obstacle. With crypto trading outlawed in China, authorities are seizing stolen funds without a legal mechanism to liquidate them.
This paper recommends a national platform to store, value, and dispose of confiscated goods through approved methods, together with an expert committee that can establish principles for the use of data on the chain and international exchange rates.
It also promotes bilateral and multilateral agreements and a “chain of arbitration agreement” blockchain to track and stop money moving abroad.
The guidelines are not legally binding, but they show how Chinese courts can help. These ideas come in the form of Chinese networks to be prepared $ 16.15 billion in 2025, about 20% of the world, according to Chainalysis.
In 2024, Chinese prosecutors prosecuted more than 3,000 people on charges related to crypto-betting, a number that underscores the scale of the problem.
