China Plans to Strengthen Crypto Surveillance with Updated AML Laws
China is reportedly making preparations to tighten its surveillance over the growing crypto sector by amending its anti-money laundering (AML) laws to encompass crypto transactions. The decision, discussed by a group of executives chaired by Prime Minister Li Qiang, marks the first major amendment to China’s AML rules since 2007. The focus of the amendment is to address concerns regarding crypto money laundering issues, which have been on the rise.
Addressing Crypto Money Laundering Crimes
Peking University professor Wang Xin emphasized the urgency of addressing the use of cryptocurrencies in money laundering, stating that it is the most important issue at the legal level. Although China banned providing or receiving services for cryptocurrencies in 2021, the increasing trend of cryptos being used in money laundering crimes has exposed gaps in existing measures. Yan Lixin, executive director of the China Anti-Money Laundering Research Center at Fudan University, highlighted the need for legal authorization to combat crypto-related money laundering effectively.
Similar Amendments and Future Plans
Hong Kong’s Securities and Futures Commission (SFC) introduced a similar amendment to its AML regulations in April 2023. The regulator has also announced plans to update its framework on cryptocurrency sales and requirements. The revised draft of China’s AML regulations is expected to be passed in 2025, according to Professor Wang Xin. This move reflects China’s determination to strengthen its oversight of the crypto sector and combat illicit activities.
Hot Take: China Takes Steps Towards Regulating Crypto Transactions
China’s plan to amend its AML laws to include crypto transactions demonstrates its commitment to enhance surveillance over the crypto sector and address concerns regarding money laundering activities. By updating its regulations, China aims to close the gaps that have allowed cryptocurrencies to be used in illicit transactions. The move aligns with similar actions taken by other jurisdictions, such as Hong Kong, to tighten AML measures for cryptocurrencies. As the crypto industry continues to evolve, it is likely that more countries will introduce regulatory changes to mitigate risks and ensure compliance.
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