A new legal interpretation has resulted in China’s intensification of its cryptocurrency enforcement, which now classifies crypto transactions as money laundering.
The Supreme People’s Court and the Supreme People’s Procuratorate have recently released new guidelines that target a variety of money laundering activities, including those that involve cryptocurrencies. These new regulations establish unequivocal legal consequences for individuals who conceal illicit funds with digital currencies.
The updated regulations will result in severe penalties for individuals who use crypto to conceal the origins of illicit money. The guidelines explicitly state that accusations of ignorance will not be considered a valid defense. Courts will assess the knowledge and management of funds by considering the transaction details and the overall context of the activities.
Significant thresholds have been established, with transactions exceeding 5 million RMB in laundered funds being regarded as particularly grievous. Heavy fines and potential imprisonment may result from failure to cooperate or the infliction of significant financial damage.
The guidelines also encompass a variety of methods for laundering money through cryptocurrency, such as the use of the currency in pawn shops, unsafe investments, or the concealment of cash in retail and entertainment venues. Individuals and organizations that are culpable of engaging in such activities will be subject to severe legal penalties and fines.
There is a possibility of a reduced sentence for individuals who come forward and assist in the recovery of the laundered funds, provided that the offense is deemed minor. Convictions will incur substantial financial penalties, which may extend from 10,000 RMB to 200,000 RMB, in addition to the potential for extensive prison sentences.
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