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 procuratorate’s newspaper, it was written by two prosecutors from Yuhu County in Hunan Province and an associate law professor at Xiangtan University.
The authors argue that the decentralized, pseudonymized, and cross-border design of virtual currencies has bypassed China’s legal framework and created a three-part problem: defining the crime, collecting evidence, and recovering stolen assets.
At the heart of the debate is a gap between laws. Anti-Money Laundering Law in China Restrictions dropped To which predicate crimes apply, but Article 191 of the Criminal Code is still restrictive Money laundering Fees are in seven categories.
As a result, most cryptocurrency cases fall under Section 312, which covers concealment of criminal proceeds, a charge the authors describe as sweeping. They call for broader use of money laundering law and the “one case, two horse” principle, which requires investigators to look for signs of money laundering in every major criminal investigation.
Burden shifts in Chinese courts
Three proposals stand out. The first, described as blockchain self-authentication, would treat on-chain records from public block explorers as trusted when hash values match, and would initially prove their integrity.
The second would shift the burden of proof: once the prosecution presents the transaction chain analysis report, the defense will need to refute it.
The third allows courts to presume intent to launder money from conduct alone. Under this standard, the use of mixers or privacy coins, the sale of large holdings at off-market prices, or high-value transactions through anonymous wallets without a clear source would prove intent unless the defendant provides a reasonable rebuttal.
The authors also address evidence gathering, noting that mixers, privacy coins, and decentralized exchanges allow multi-layered sharding and cross-chain transfers that traditional methods struggle to track.
They propose adaptive rules for electronic data, tiered standards of proof, and clearer licensing of technical measures such as real-time monitoring and traffic analysis, with limits to protect personal information and cybersecurity.
Asset recovery is another hurdle. With cryptocurrency trading banned in China, authorities are holding onto seized coins without a legal channel to liquidate them.
The paper recommends establishing a national platform to store, value and dispose of confiscated assets through compatible channels, along with an expert committee that determines values using on-chain data and international exchange rates.
It also calls for the conclusion of bilateral and multilateral agreements and a “chain of judicial cooperation” based on blockchain technology to track and freeze funds transferred abroad.
These recommendations do not carry any legal force, but they indicate a possible direction for Chinese courts. Proposals arrive as money laundering networks in Chinese processed $16.15 billion in 2025, about 20% of the global total, according to Chainalogy.
In 2024, Chinese prosecutors brought charges against more than 3,000 people in cryptocurrency-related money laundering cases, a number that highlights the scale of the challenge.
