China’s Supreme People’s Procuratorate is taking a firm stance on digital currencies as it prioritizes enforcement of the country’s updated Anti-Money Laundering (AML) Law. This measure aims to address emerging financial crimes and ensure national security in the rapidly evolving fintech landscape.
During a study session chaired by Procurator-General Ying Yong, the Procuratorate underscored the critical role of inter-agency coordination in tackling crypto-related money laundering and enforcing the revised legislation effectively.
Updated AML Law to Include Crypto Oversight
Effective from January 2025, the revised AML Law expands the scope of predicate offenses for money laundering to encompass virtual currency transactions.
Procurator-General Ying highlighted:
“Anti-money laundering is both a domestic and international responsibility. It directly impacts national security, economic stability, and the modernization of governance systems.”
The updated legislation reflects China’s focus on bolstering financial and economic security. Ying called on prosecutorial bodies to adapt to these revisions and proactively address risks associated with financial technology.
Professor Wang Xin of Peking University contributed to the session, explaining key revisions and advising prosecutorial agencies on accurate application and supervision under the new framework.
Chinese Court Bans Crypto for Wage Payments
In a recent legal development, a Shenzhen court ruled against the use of cryptocurrencies such as USDT for wage payments, reaffirming that salaries must comply with national labor laws and be paid in legal tender.
The case involved an engineer named Zhou, who claimed his employer had agreed to pay part of his salary—25,000 yuan—in USDT, in addition to 20,000 yuan via bank transfer. However, due to insufficient evidence supporting Zhou’s claim, the court sided with the employer, setting a precedent against crypto-based compensation.
Implications for the Crypto Ecosystem
These legal and policy measures signal China’s escalating scrutiny over digital currencies, framing them as potential threats to financial stability and national security. The broader implications include tighter regulatory environments for crypto transactions and their use in everyday financial activities.
For crypto enthusiasts and businesses, this underscores the importance of aligning with evolving global and regional compliance standards to mitigate risks.
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