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April 16, 2025 – Beijing
China is currently facing significant issues in managing the increasing quantity of cryptocurrencies confiscated due to criminal activity. Despite a ban across the country on trading in crypto, local governments have partnered with private companies in the process of liquidating the digital assets, which has led to ethical and legal concerns because of the absence of uniform rules.
To address the rise in the number of crypto-related crimes that totaled 430.7 billion yuan ($59 billion) in 2023, Chinese authorities have revised their Anti-Money Laundering (AML) laws to include transactions with virtual assets. This is the first significant change to China’s AML laws since the year 2007. In the new regulations, anyone who is found guilty of using virtual assets to conceal money can face fines of anywhere from 10,000 to 200,000 yuan (approximately $1,400-$28,000) and jail sentences ranging from five to 10 years.
Financial and legal experts advocate for central control of confiscated cryptocurrencies. The central bank could be the one that is responsible for their disposal or setting up a sovereign crypto reserve, perhaps within Hong Kong, where crypto trading is legal. Such an arrangement will ensure that there is transparency and consistency when managing these assets.
While China continues to refine its approach to cryptocurrencies, these developments suggest that it is undergoing a major shift in its regulatory environment, with enforcement balancing the complex nature of the world of digital currency.
Stay tuned to AtoZTechWorld as we follow China’s next steps in managing and regulating digital assets.
