Executive Summary
Ying Yong, the Prosecutor-General of China's Supreme People's Procuratorate (SPP), has publicly addressed the escalating challenges posed by virtual currency-related crimes, including money laundering and bribery. These illicit activities are increasingly complex to investigate, gather evidence for, and recover assets from, primarily due to the inherent hidden and deceptive characteristics of virtual currencies. The SPP emphasizes that these crimes not only jeopardize citizen property safety but also undermine global financial stability, necessitating a consensus on enhanced international cooperation in anti-money laundering (AML), anti-corruption, and digital asset recovery efforts.
The Event in Detail
Speaking before the 15th China-ASEAN Prosecutors-General Conference in Hong Kong, Prosecutor-General Ying Yong highlighted how advanced technologies such as big data analysis, cloud computing, blockchain, and artificial intelligence are being exploited to facilitate sophisticated money laundering methods. He noted a specific trend where virtual currencies and underground banking systems are increasingly utilized to channel illicit funds internationally, presenting significant obstacles for law enforcement agencies. Official statistics reveal a substantial increase in related prosecutions: between January 2024 and June 2025, China tried over 39,000 individuals for duty crimes, with 8,050 cases occurring in critical sectors such as finance and energy. Additionally, nearly 4,700 individuals faced charges for repeated large-scale bribery. Money laundering cases alone saw an 11% increase from 2022 to 2024. Recent operations also uncovered links between cross-border illegal gambling syndicates and severe offenses, including kidnappings and murders. One specific operation in Macau reportedly uncovered illicit income exceeding RMB 300 million (approximately US$41 million).
Deconstructing Financial Crime Mechanics
Virtual currencies introduce unique complexities for asset tracing and recovery. While some blockchain ledgers offer transparency, offenders frequently exploit privacy-focused tokens, decentralized exchanges (DEXs), and layering techniques across multiple wallets to obscure their identities. The anonymous nature of blockchain technology further complicates efforts to link digital wallets to real-world individuals, contrasting sharply with traditional banking systems where accounts are tied to verified identities. Moreover, the misuse of cross-chain bridges and Decentralized Finance (DeFi) protocols presents an evolving threat, as these technologies enable illicit funds to be moved across different blockchain networks, further complicating tracking. Successful asset tracing in this environment requires advanced forensic tools, multi-faceted investigative processes combining on-chain analysis with related party investigations, and asset-purchase tracing.
Strategic Regulatory Response
China's legal framework has significantly evolved to address these challenges. The revised Anti-Money Laundering law of the People's Republic of China, effective January 1, 2025, introduced stringent Client Due Diligence (CDD/KYC) upgrades. These include Beneficial Ownership Transparency, requiring the tracing of entities with 25% or more ownership to the final natural person controller, and Dynamic Ongoing Monitoring for re-CDD. The law also mandates Third-Party CDD Oversight and extends record-keeping requirements for identity and transaction records to at least 10 years. From 2025, major foreign financial institutions operating in China are subject to
Edgen Crypto·Sep 27 2025, 06:54