Over 1,000 Prosecuted as China Tightens Grip on Crypto Laundering

As global organizations, including the United Nations, explore strategies to curb the rising threat of crypto money laundering, China has taken decisive action. A report presented by Ying Yong, the Procurator-General of the Supreme People’s Procuratorate, at the Third Session of the 14th National People’s Congress, reveals that in 2024 alone, 3,032 individuals were prosecuted for crimes related to cryptocurrency money laundering. This development underscores China’s aggressive approach to financial crime and its efforts to cleanse its financial ecosystem of illicit activities.

China’s Aggressive Stance on Crypto Crime

According to the report, over 3,000 individuals faced legal consequences for their involvement in crypto-related money laundering activities. The scale of this crackdown reflects the Chinese government’s determination to eliminate financial fraud and ensure tighter control over digital assets.

How Crypto Money Laundering Works

Crypto money laundering operates through a series of obfuscation techniques. Criminals first convert illicit funds into cryptocurrencies, taking advantage of their relative anonymity. These digital assets are then blended with other cryptos through mixing services, making them harder to trace. Subsequently, they are transferred across multiple digital wallets, further complicating tracking efforts. Finally, the cleaned crypto is either cashed out into fiat currency under the guise of legitimate trading or used to purchase luxury assets, such as high-value real estate or goods, disguising its illicit origins.

China’s Broader Crackdown on Financial Crimes

Beyond crypto-related offenses, the work report highlights a wider crackdown on financial fraud. In 2024, Chinese authorities arrested approximately 25,000 individuals for various financial crimes, demonstrating a broader effort to restore financial integrity.

The report further details that at least 825 individuals were prosecuted for securities crimes, including financial fraud and insider trading. Additionally, authorities took action in high-profile corporate fraud cases, including the prosecution of 42 individuals connected to the Evergrande Group scandal and 49 individuals linked to the Zhongzhi Group case. The China Securities Regulatory Commission has been collaborating closely with law enforcement agencies to address irregularities within the private equity sector.

China’s Regulatory Landscape for Cryptocurrencies

China’s approach to cryptocurrencies is marked by stringent prohibitions rather than structured regulation. Unlike other jurisdictions that have established dedicated regulatory bodies for crypto oversight, China enforces restrictions through multiple government agencies.

The People’s Bank of China (PBOC) plays a central role in these efforts, spearheading crackdowns on unauthorized digital asset transactions. Additionally, agencies responsible for financial stability, cybersecurity, and law enforcement coordinate to enforce crypto bans, ensuring compliance with national policies.

Conclusion: A Firm Stand Against Crypto-Related Crimes

China’s sweeping crackdown on crypto money laundering and financial fraud reaffirms its commitment to eradicating illicit financial activities. By prosecuting thousands of individuals and tightening regulatory enforcement, the government sends a clear message: illegal crypto transactions will not be tolerated. While these measures may stifle certain blockchain innovations within the country, they also reflect Beijing’s broader aim to maintain financial stability and prevent economic disruptions stemming from unregulated digital assets.