China’s Supreme People’s Procuratorate has published a set of recommendations that would reshape how the country investigates and prosecutes cryptocurrency-related money laundering, including a proposal to treat the use of mixers and privacy coins as evidence of criminal intent.
The article, released in the official Procuratorial Daily, was written by two prosecutors from Hunan Province’s Yuhu District and an associate law professor at Xiangtan University.
The authors argue that the decentralized, pseudonymous, and cross-border design of virtual currencies has outpaced China’s legal framework and created a three-part problem: defining the offense, gathering evidence, and recovering stolen assets.
At the center of the debate is a gap between statutes. China’s Anti-Money Laundering Law has dropped restrictions on which predicate offenses qualify, but Article 191 of the Criminal Law still limits money laundering charges to seven categories.
As a result, most crypto cases fall under Article 312, which covers concealing criminal proceeds, a charge the authors describe as a catch-all. They call for wider use of the money laundering statute and a “one case, two checks” principle that would require investigators to look for laundering indicators in every major criminal probe.
Burden shifts in China’s courts
Three proposals stand out. The first, described as blockchain self-authentication, would treat on-chain records from public block explorers as reliable when hash values match, and would preliminarily establish their integrity.
The second would shift the burden of proof: once prosecutors submit a transaction-chain analysis report, the defense would need to disprove it.
The third would allow courts to presume laundering intent from conduct alone. Under that standard, the use of mixers or privacy coins, the sale of large holdings at off-market prices, or high-value transactions through anonymous wallets with no clear source would establish intent unless a defendant offered a reasonable rebuttal.
The authors also address evidence collection, noting that mixers, privacy coins, and decentralized exchanges allow multi-layered splitting and cross-chain transfers that traditional methods struggle to trace.
They propose adaptive rules for electronic data, tiered standards of proof, and clearer authorization for technical measures such as real-time monitoring and traffic analysis, with limits to protect personal information and cybersecurity.
Asset recovery presents a further obstacle. With crypto trading banned in China, authorities hold seized coins without a legal channel to liquidate them.
The paper recommends a national platform to store, value, and dispose of confiscated assets through compliant channels, along with an expert committee that would set values using on-chain data and international exchange prices.
It also urges bilateral and multilateral agreements and a blockchain-based “judicial cooperation chain” to trace and freeze funds moved abroad.
The recommendations carry no legal force, but they signal a possible direction for China’s courts. The proposals arrive as Chinese-language laundering networks processed $16.15 billion in 2025, about 20% of the global total, according to Chainalysis.
In 2024, Chinese prosecutors brought charges against more than 3,000 people in crypto-related laundering cases, a figure that underscores the scale of the challenge.
