China is revamping how it cracks down on crypto-based money laundering - and one of the boldest proposals is making blockchain transaction records valid evidence in court. These judicial and procedural reforms were proposed to strengthen investigations, evidence gathering, and asset recovery in virtual currency money laundering cases, according to an article published in the People’s Procuratorate Daily.
The proposal comes from a combination of practitioners and academics: prosecutors from Yuhu District in Xiangtan, Hunan, alongside researchers from Xiangtan University. They did not merely offer criticism, but mapped out precisely where Chinese law currently falls short.
Three Hurdles Long Hampering Investigators
The authors identified three primary obstacles: difficulty determining criminal liability, challenges in collecting evidence, and difficulty recovering illegal assets. The root of the problem lies in Article 191 of China’s Criminal Law, which only applies to seven specific predicate offenses. Consequently, many crypto money laundering cases must be prosecuted under the more general and lenient charge of ‘concealing criminal proceeds.’
To address this, they proposed dedicated case-handling guidelines from top judicial authorities, alongside a ‘dual investigation’ approach - examining the predicate crime and laundering activities simultaneously. Broader blockchain analysis training for investigators and prosecutors was also included on the list.
Blockchain as Evidence, Official Auctions for Seized Assets
This is where the proposal gets interesting. They urge that publicly verifiable blockchain transaction records be recognized as authentic electronic evidence, and that analytics reports from compliant blockchain analysis firms be admissible in court - subject to judicial oversight of the methodologies used.
Regarding seized assets, China faces a unique dilemma: the country bans crypto transactions, making it difficult for authorities to dispose of seized assets through conventional channels. As a solution, they proposed a national mechanism to standardize the seizure, custody, valuation, and disposal of confiscated crypto through a centralized custody platform and official auctions.
Part of the Five-Year Plan
This proposal is not an isolated initiative. It builds on moves by China’s central bank (PBOC), which stated in June that money laundering via virtual currencies remains an enforcement priority for the next five years - amid the growing combination of crypto with cross-border fund transfers and underground banks.
If these proposals are integrated into policy, their impact will extend far beyond China’s borders. A nation with one of the world’s largest underground crypto populations is learning to read the blockchain as an open ledger. For bad actors who assumed crypto granted immunity, the trajectory is clear: the very evidence they considered unreachable could become the most damning proof against them.
Reported by crypto.news.
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
