China plots holistic amendment to its anti-money laundering (AML) guidelines to incorporate cryptocurrency-associated transactions. This is happening amid calls by the nation’s legislators for improved scrutiny of the promising crypto sector.
In 2021, China implemented a blanket ban on the utilization of crypto. However, advancements in technology and the decentralized nature of crypto have enabled mainland users to get a means to access the market.
China State Council to Amend AML
Local media revealed that on January 22, Li Qiang, China’s Prime Minister, chaired a meeting to deliberate about the amended AML regulations. China’s initial draft of the amended AML regulations was suggested in 2021, with the updated draft incorporated in the State Council’s legislative work last year and will be approved by next year.
This will be China’s first considerable modification to AML guidelines since 2007. Financial professionals and famous scholars who were part of the discussions concerning the amended draft of the anti-money laundering claimed that the AML law entails a comparatively broad scope.
The vast scope limits the draft’s comprehensiveness. The most pressing content should first be reflected in a framework.
Resolve Disconnect in AML Guidelines
Wang Xin, a Peking University Law School professor who was part of the deliberation, emphasized the pressing need for settling problems concerning crypto money laundering at the legal level.
Xin illustrated that the utilization of digital assets and cryptocurrency for money laundering has slowly turned into a mainstream habit, and the nation’s present regulations do not vividly define digital assets.
Wang said that despite the amended draft including digital asset money laundering prevention, operational guidance concerning the subsequent confiscation, freezing, and deduction of the assets from crimes does not exist, leading to a ‘disconnect.’ He also noted that an improvement is needed to fight digital asset-associated money laundering.
In 2021, China executed a blanket veto on the utilization of cryptocurrency, barring all forms of mining and off-shore exchanges from providing services.
Nevertheless, technological improvements and the decentralized nature of cryptocurrencies have enabled mainland users to get means of accessing the crypto market, resulting in risks of money laundering. The revised law seeks to implement stern regulations to prevent such activities.