China’s Supreme People’s Procuratorate has outlined new recommendations that could transform the country’s approach to cryptocurrency-related money laundering investigations. The guidance spe
China’s Supreme People’s Procuratorate has outlined new recommendations that could transform the country’s approach to cryptocurrency-related money laundering investigations. The guidance specifically proposes treating the use of crypto mixers and privacy coins as strong evidence of criminal intent.
The recommendations were published in the Procuratorial Daily and authored by two prosecutors from Hunan Province’s Yuhu District, along with a law professor at Xiangtan University. The authors claim that the pseudonymous, decentralized, and international nature of digital assets has outpaced China’s current legal tools, creating challenges in defining offenses, collecting evidence, and recovering illicit assets.
Currently, key barriers exist between statutes. While China’s Anti-Money Laundering Law has broadened the basis for prosecution, Article 191 of the Criminal Law still restricts money laundering charges to just seven categories. As a result, most cryptocurrency cases fall under Article 312, which deals with concealing criminal proceeds—a framework the authors consider overly broad and insufficient.
The authors advocate for a wider application of money laundering laws to cryptocurrency and recommend a “one case, two checks” approach requiring investigators in each major criminal case to seek indicators of laundering activity.
Among the most significant recommendations, the paper calls for courts to grant preliminary reliability to on-chain records from public block explorers, provided hash values confirm their integrity. In addition, another proposal suggests shifting the burden of proof: once prosecutors provide a transaction-chain analysis, defendants would bear responsibility to rebut its accuracy.
Perhaps most controversially, the authors propose that courts should presume money laundering intent if certain types of conduct are present. This includes using mixers or privacy-focused cryptocurrencies, making large sales at off-market prices, or transacting high-value amounts from unidentified wallets. Unless the accused offers a reasonable explanation, such behaviors could serve as proof of intent.
Mini dictionary: Crypto mixer — A crypto mixer (or tumbler) is a service that obscures the transaction trail of cryptocurrencies by pooling assets and redistributing them, making it difficult to trace the origin and destination of funds on the blockchain.
The paper also highlights the technical difficulties facing investigators. Mixers, privacy coins, and decentralized exchanges make it easier to conduct cross-chain transfers and split assets into multiple layers, complicating tracking efforts with traditional methods.
To address these obstacles, the authors recommend adjusting rules for handling electronic data, applying different standards of proof, and authorizing more advanced technical tools such as real-time blockchain monitoring. At the same time, they suggest safeguards to prevent violations of privacy and cybersecurity standards.
Another problem involves seized cryptocurrency assets. Since official trading is banned in China, authorities that confiscate crypto do not have a legal mechanism to liquidate these holdings.
The recommendations include establishing a national platform to store, evaluate, and dispose of confiscated digital assets through regulated channels. The proposal also calls for an expert committee to set asset values based on on-chain data and international exchange rates.
International cooperation is a further area of focus. The paper urges the creation of bilateral and multilateral agreements, alongside a blockchain-powered “judicial cooperation chain” to help trace and freeze assets moved overseas.
According to the authors, the integration of mixers and privacy coins into laundering schemes represents a growing risk that China’s current laws have struggled to address, and courts should recognize these tools as indicative of illicit activity when no legitimate purpose can be shown.
As recommendations, the proposals are not legally binding; however, they signal possible direction for judicial policy on digital assets. Recent data highlights the urgency: Chainalysis reported that Chinese-language laundering networks processed $16.15 billion in 2025, about one-fifth of the global total, while Chinese prosecutors charged over 3,000 individuals in crypto laundering cases in 2024.
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