China Plans to Update Anti-Money-Laundering Law for Virtual Assets
China is taking steps to revise its outdated Anti-Money-Laundering (AML) law in order to combat the increasing risks associated with virtual assets. The draft amendment will undergo review by the national legislature after being discussed at a State Council meeting chaired by Chinese Premier Li Qiang. While the full text of the proposed amendment has not been disclosed, legal scholars believe that its main objective is to tackle money laundering involving virtual assets. This urgency to address the issue is emphasized by experts who highlight the need to adapt to evolving practices.
China’s Proactive Measures Against Crypto
China’s latest initiative reflects the government’s determination to stay updated with developments in the Web3 space, including non-fungible tokens and other virtual assets. This effort aligns with the country’s ban on cryptocurrency operations, such as mining and trading. The forthcoming amendment aims to address emerging forms of money laundering risks and adapt to evolving practices.
China’s Outdated AML Law
China’s AML legislation has remained largely unchanged for over 17 years, failing to account for the emergence of cryptocurrencies like Bitcoin. Experts argue that revising China’s AML law is necessary given the significant evolution of international standards and best practices. The Financial Action Task Force (FATF) has already provided recommendations to address virtual assets in the proposed amendment. Despite China’s ban on virtual currencies, the borderless nature of virtual asset transactions can still have indirect impacts on the country when exploited for illicit purposes.
Conclusion
China’s move to update its AML law demonstrates its commitment to addressing money laundering risks associated with virtual assets. By revising the law, China aims to adapt to evolving practices and international standards. The country’s ban on cryptocurrency activities highlights the need for proactive measures to tackle emerging money laundering risks. With the upcoming amendment, authorities will have additional powers and tools to specifically target challenges arising from virtual assets and new technologies. While China remains cautious about cryptocurrencies, it recognizes the importance of addressing risks in the virtual asset space.
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