Beijing police recently dismantled a vast money-laundering network allegedly moving 800 million yuan ($111.36 million) through cryptocurrency transactions tied to telecom fraud and online gambling. The operation reportedly used foreign cryptocurrency platforms to mask the illegal funds, complicating efforts for Chinese authorities as they strive to address rising cyber and financial crimes.
The Beijing clamp down on this money-laundering scheme follows a legal first in China where the Xuhui District Procuratorate in Shanghai pursued the country’s first private wallet critical theft case. The suspects, led by an individual identified as Liu, infiltrated a virtual wallet app to insert a backdoor, allowing them to access 27,622 mnemonics and 10,203 private keys. The explicit case implies the cooperation of the Xuhui District Procuratorate and Public Security Bureau issued guidelines for Virtual Assets management in the criminal investigation as a vital legislative step for China’s stance regarding digital currency crimes.
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New Legal Interpretation of Virtual Assets in Money Laundering
Equally significant, the Supreme People’s Court and Supreme People’s Procuratorate of China have come up with a legal indication encompassing the use of virtual assets in money laundering exercises. The recent amendment to Article 191 of Criminal Law now regards any virtual asset transaction used to transfer or conceal criminal proceeds as money laundering. This ruling settles the matter that managing funds through cryptocurrencies associated with any of the seven enumerated money laundering predicate crimes becomes unlawful.
Attorney Shao Shiwei explained that transactions involving virtual assets linked to these crimes would qualify as money laundering. Furthermore, Attorney Liu Yang pointed out that this development is the first where the ‘virtual assets’ fall within the interpretation of the Judicial Considering on Money-Laundering Crimes. This clarification strengthens the legal framework around digital currencies as authorities respond to increased cases involving virtual assets.
China’s prohibition on domestic cryptocurrency exchanges remains firmly in place despite this refined stance on virtual assets in criminal cases. While holding or trading digital assets individually is not explicitly prohibited, the new legal interpretation may prompt individuals to approach such activities cautiously.
Conclusion
The combined crackdown on a large-scale money-laundering ring and the country’s first wallet-critical theft case highlights China’s evolving stance on digital currency crimes. With enhanced legal interpretations and guidelines for handling virtual assets, Chinese authorities signal a more defined framework for managing digital currencies in criminal cases.
Also Read: China Takes Legal Action in First Digital Wallet Private Key Theft Case
