- China’s court to crack down on crypto, underground banks in fraud laundering.
- Chinese-language laundering networks moved $16.1 billion in crypto in 2025.
- Recently, the 2021 crypto trading ban was reaffirmed, with strict limits on stablecoin issuance.
On February 26, China’s Supreme People’s Court said its next enforcement phase will target crimes involving virtual currencies and underground banks used for money laundering.
Wang Bin, president of the Third Criminal Tribunal, made the statement at a press conference focused on telecom fraud and financial abuse cases.
The court will prioritize ringleaders, core members of fraud groups, financial backers, illegal immigration organizers, and groups providing armed protection for cross-border cybercrime.
Virtual currency channels are now explicitly named as part of the laundering chain. The court also confirmed the heavier use of property penalties.
Criminals will face asset confiscation, and courts will push suspects to return stolen funds. Also, voluntary repayment will affect sentencing. Those who refuse to compensate victims despite having the ability will face harsher punishment.
$16.1 Billion Laundered Through Chinese-Language Crypto Networks
A 2025 Chainalysis report estimates that Chinese-language money laundering networks moved $16.1 billion through cryptocurrency transactions last year.
That equals roughly 20% of the global illicit crypto economy, which Chainalysis valued at over $82 billion. These networks operate largely through Telegram “guarantee” channels.
They advertise liquidity with images of cash stacks and public testimonials. The platforms act as informal escrow hubs, connecting buyers and sellers of illicit services. They do not execute transfers directly, but they facilitate deals.
According to the report, six primary laundering techniques are used. Crypto is central because it moves value across borders without traditional banking oversight.
Clients range from organized crime groups to sanctioned state actors. Chainalysis’s national security team reported flows tied to North Korean-linked activity alongside other criminal operations.
Reinforced Ban on Trading and Stablecoins
Earlier this month, eight national agencies, including the People’s Bank of China (PBOC) and the China Securities Regulatory Commission (CSRC), reasserted the 2021 ban on crypto trading and stablecoins. The prohibition includes cross-border activity.
Domestic entities cannot issue digital tokens overseas without approval. Foreign firms cannot offer related services inside China. Yuan-pegged stablecoins cannot be issued abroad without state authorization, including by overseas branches of Chinese firms.
Regulators argue stablecoins replicate sovereign currency functions and threaten monetary control. Tokenization of real-world assets now faces strict limits with narrow exceptions.
Related: China’s Rising GDP Share Signals a Shift in Global Economic Power
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Source: https://coinedition.com/china-supreme-court-expands-crackdown-to-crypto-related-money-laundering-networks/
