Chinese prosecutors seek presumption of crypto laundering intent

An opinion published in the Procuratorate Daily outlines a framework for prosecuting crypto-linked money laundering. The article, authored by two Hunan district prosecutors and a university law professor, recommends presuming criminal intent when suspects use coin mixers or privacy coins unless they produce reasonable counter-evidence. It also calls for courts to accept verifiable on-chain records and reports from blockchain analytics firms as admissible evidence and for a national platform to custody and dispose of seized cryptocurrency.

The article does not have the force of law. It sets out prosecutorial tactics the authors say should guide investigators and courts. The proposals advise treating use of transaction-obscuring tools, large offloads at prices the authors describe as “obviously unreasonable,” and repeated large transfers through anonymous wallets as strong indicators of laundering unless defendants present reasonable counter-evidence. The authors urge investigators to map crypto flows in every suspected case and to apply a “double investigation of one case” rule that examines both the underlying offense and potential laundering activity.

On evidence, the article proposes a “blockchain data self-verification” standard. Under that idea, on-chain records that can be checked on a public block explorer with matching hash values would be treated as presumptively genuine, shifting the burden to anyone who disputes them. Reports from compliant blockchain analytics firms, including fund-flow maps and address clustering, would be accepted as expert evidence. The article also permits prosecutors to rely on circumstantial or fragmentary material if those pieces form a coherent chain linking funds to criminal activity.

The authors point to a legal gap that complicates prosecutions. China’s statutory money-laundering offense covers only seven categories of predicate crimes, so prosecutors often charge a broader concealment offense as a workaround. The article builds on a 2024 judicial interpretation that treats virtual-asset transfers used to move criminal proceeds as laundering and proposes formal procedures to ensure every underlying crime is screened for possible laundering.

The piece addresses what to do with seized tokens after confiscation. Since China banned retail crypto trading and mining in 2021, authorities have limited legal channels to convert tokens to cash. The authors propose a national custody and disposal platform to handle seized crypto through compliant channels such as directed auctions, a standing expert committee to value holdings using on-chain data and global exchange prices, and cross-border arrangements plus a blockchain-based “judicial cooperation chain” to trace and recover assets moved offshore. The article notes that local authorities have sometimes sold seized crypto through private firms in offshore markets and presents a formal system as an alternative.

The article cites recent enforcement activity and estimates. Official figures show more than 3,000 people were charged with crypto-related money laundering in 2024. Law enforcement has dismantled large laundering rings, including one accused of moving about $1.7 billion in cryptocurrency. Independent chain-analysis firms estimated that Chinese-language laundering networks processed roughly $16 billion in 2025 and accounted for about a fifth of global crypto money-laundering flows.

Because the article is advisory, any change in practice would depend on prosecutors, courts and regulators adopting the proposals or on formal guidance from higher judicial bodies.