China has seen an increase in user activity in transactions involving cryptocurrencies, so authorities are preparing to strengthen anti-money laundering (AML) measures in the crypto industry.
Cryptocurrency transactions will be included in the new version of the rules, which will be reviewed and legislated in 2023 and come into effect as early as 2025. Already, the government is calling for scrutiny of the nascent crypto sector.
The State Council discussed changes to anti-money laundering regulations and revisions to the Anti-Money Laundering Law. Premier Li Qiang also attended the meeting, Cointelegraph reported.
The law was first proposed in 2021 but now needs to be revised to include cryptocurrency transactions. It will be amended in 2023 and is expected to be signed into law in 2025.
Financial experts invited to draft and discuss the revised AML regulations believe that the law has a broad scope, making it difficult to create comprehensive regulations. For now, the draft can only cover certain categories.
Professor Wang Xin of Peking University Law School said it is important to urgently address cryptocurrency money laundering at the legal level. The professor noted the increasing trend of using cryptocurrencies for money laundering, while there is no clear definition of digital assets in Chinese law.
While consulting with the government and lawmakers, Prof. Wang Xin said that amending the law implies preventing money laundering through crypto-assets, but there are no clear guidelines on how to seize and confiscate money derived from illegal activities. According to Wang Xin, it also makes sense to consider all ways to strengthen the fight against money laundering through digital assets.
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