Chinese prosecutor newspaper tests tougher crypto laundering playbook

China’s top prosecutors’ newspaper has published a legal commentary that sketches a tougher way to pursue crypto money-laundering cases. For everyday crypto users and investors, the signal is clear: tools built to hide transaction trails could draw heavier scrutiny if prosecutors adopt the ideas.

The piece appeared in the theory section of Procuratorate Daily, the newspaper tied to China’s Supreme People’s Procuratorate. It was written by two district prosecutors from Hunan province and a university law professor, according to the publication.

The commentary is not law and does not change China’s rules by itself. Still, writing in an official legal newspaper can show how parts of the prosecution system are thinking about crypto enforcement.

Privacy tools would become evidence of intent

The authors argue that courts should be allowed to infer criminal intent in some crypto cases when a suspect uses privacy-focused tools and cannot provide “reasonable counter-evidence.”

Those tools include coin mixers, which pool and shuffle crypto transactions to make funds harder to trace, and privacy coins, which are cryptocurrencies designed to conceal details such as sender, receiver or amount. The commentary also points to anonymous wallets with no clear identity link, frequent large transfers and selling crypto at prices the authors describe as “obviously unreasonable.”

In plain English, the proposal would make certain behavior a legal warning sign. Prosecutors would not need to prove intent only through a direct admission or a fully traced chain of funds. They could ask a court to treat the pattern of transactions as part of the proof.

The authors also say verified blockchain records should be easier to use in court. They propose treating public on-chain data as authentic when it can be checked through a blockchain explorer and matched by hash value, unless a defendant can challenge it successfully.

Reports from compliant blockchain analytics companies would also count as expert evidence under the proposal. Those reports can include maps of where funds moved and address clustering, a method that groups wallet addresses believed to be controlled by the same person or entity.

China’s legal gap on crypto laundering

The commentary says prosecutors face a charging problem under current Chinese law. China’s specific money-laundering offense applies to seven categories of underlying crimes, the authors wrote, so crypto cases are often handled through a broader concealment charge.

The authors say that broader charge has become an overstretched substitute. They call for a “double investigation of one case” approach, meaning investigators would examine both the original crime and whether the flow of crypto created a separate laundering case.

That proposal builds on a 2024 judicial interpretation from China’s Supreme People’s Court, which already treats the use of virtual-asset transactions to move criminal proceeds as a form of money laundering, according to the court document cited by the commentary.

Seized crypto creates a policy problem

The authors also address what authorities should do with confiscated tokens. China bans crypto trading, which leaves officials without a straightforward legal route for selling assets they seize in criminal cases.

To solve that, the commentary urges China to create a national platform for holding and disposing of seized cryptocurrency. The proposal would give prosecutors and other authorities a formal channel for handling tokens after enforcement actions, while keeping the broader trading ban in place.

The policy ideas remain proposals. They do, however, show Chinese legal officials looking for ways to make blockchain records, analytics reports and privacy-focused crypto activity more central to criminal cases.

This story draws on original reporting from Decrypt.