China to Include Cryptocurrency in Major Anti-Money Laundering Law Revision
Summary:
China plans a major amendment to its Anti-Money Laundering laws to include cryptocurrency transactions, marking the first significant change to the legislation in 17 years. Spearheaded by Prime Minister Li Qiang, the revised draft, originally proposed in 2021, aims to legally address money laundering issues involving cryptocurrencies and provide clearer definitions and guidelines for handling such cases. Despite China's blanket ban on cryptocurrencies, its users have managed to enter the market, escalating money-laundering risks. The revised regulations aim to enforce stricter rules to address this problem.
In a move to revise its Anti-Money Laundering (AML) rules, China is planning to include transactions involving cryptocurrencies. This comes in response to increased calls from country's politicians for more oversight in the burgeoning crypto sector. As per a local newspaper, the State Council, under the leadership of Prime Minister Li Qiang, held an executive meeting on 22nd January to review the amended AML legislation. The first modification of the AML laws, proposed in 2021, was incorporated into the State Council's 2023 legislative agenda, and is expected to be passed into law by 2025. This marks the most substantial update to the AML laws since they were established in 2007.
Several distinguished academics and finance specialists, who took part in the deliberations around the revised AML draft, observed that due to the law's expansive purview, making the revised draft all-encompassing is challenging. Initially, only the most pressing aspects can be outlined in a framework.
Peking University Law School Professor Wang Xin, who was part of the discussion, underscored the urgent necessity to address cryptocurrency money laundering issues legally. Xin observed that cryptocurrency and virtual assets have gradually become a dominant trends in money laundering, while existing Chinese legislation lacks clear definitions of these virtual assets.
Professor Xin also pointed out that although the revised draft incorporates measures to prevent money laundering through virtual assets, there aren't sufficient details on how to handle the seizure, freezing, confiscation and deduction of these assets obtained from money laundering. He further mentioned a disconnect and suggested improvements to tackle money laundering involving virtual assets.
Despite the countrywide ban on cryptocurrency usage, outlawing services offered by off-shore exchanges, and a blanket ban on all forms of crypto mining, mainland Chinese users have managed to navigate into the crypto market due to rapid technological advancement and the decentralised nature of cryptocurrencies. This has created a risk of money laundering. The newly revised laws aim to implement stricter rules to suppress such activities.
In other news, we uncover the true reason behind China's crypto crackdown in our magazine, and share about an embarrassing error committed by a 3AC judge on Asia Express.
Published At
1/31/2024 10:45:21 AM
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