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Financial regulation
TechPolicy

China seeks revision of anti-money-laundering law to address risks related to cryptocurrencies and other virtual assets

  • A draft amendment to the country’s Anti-Money-Laundering Law, which took effect in 2007, was discussed at a State Council meeting last month
  • The proposed AML law revision, which is expected to be passed next year, will address money-laundering risks associated with virtual assets

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China’s Anti-Money-Laundering Law has not undergone a major revision since it was enacted in 2006. Photo: Shutterstock
Xinmei Shen

China will soon implement revisions to its outdated Anti-Money-Laundering (AML) Law, in a move that legal experts see as a way to address the growing risks associated with virtual assets.

A draft amendment to the existing AML law, which was enacted in 2006 and took effect in 2007, was discussed at a State Council meeting chaired by Chinese Premier Li Qiang, and will be submitted for review by the national legislature, according to a recent report by state-run news agency Xinhua.

While the full text of the draft amendment has not been made public, the specific aim of the proposed revision is to combat money laundering with virtual assets, according to a January 31 report of Chinese digital news media Jiemian, which cited two legal scholars.

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Money laundering related to the use of virtual assets is currently the “most urgent and most necessary” issue to tackle at a legal level, said Yan Lixin, executive director at the China Centre for Anti-Money-Laundering Studies at Fudan University in Shanghai, according to the Jiemian report.

Chinese Premier Li Qiang last month chaired a meeting of the State Council that discussed a proposed amendment to the country’s existing Anti-Money Laundering Law. Photo: EPA-EFE
Chinese Premier Li Qiang last month chaired a meeting of the State Council that discussed a proposed amendment to the country’s existing Anti-Money Laundering Law. Photo: EPA-EFE
Beijing’s latest anti-money-laundering initiative reflects the government’s commitment to keep pace with Web3 developments such as non-fungible tokens and other virtual assets, while keeping steadfast with the country’s draconian ban on cryptocurrency operations including crypto mining and trading.
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The proposed AML law amendment, which is expected to be passed next year, will address new types of money-laundering risks, according to the Jiemian report, citing Peking University Law School professor Wang Xin, who is involved in the discussions about the law’s revision.

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