China Court rules “should know” the standards for crypto-laundry.

A Chinese court declared the defendant three or five years for promoting cryptocurrency transactions that included stolen funds. The Beijing No. 2 intermediate court case represents China’s strengthening enforcement on suspicious digital asset activities.

Court establishes new precedents for crypto-related money laundering

In August 2024, the defendant, who appeared as Liu in the report, intentionally sold the USDT token to others in exchange for 200,000 yuan and $27,850 in cash. The court ruled that Liu was aware that money had come from the victims of the fraud. Authorities were unable to track where the illegal funds ultimately went.

Liu’s beliefs lay a significant legal precedent in China’s cryptocurrency enforcement environment. The court held that Li’s actions constituted concealing and disguising criminal income under Chinese law. Liu received a 3.5-year prison sentence and a fine of 40,000 yuan and a $5,570 fine.

The incident highlights China’s increasingly rigorous approach to cryptocurrency-related crime. Semi-official media reports suggest that the authorities are sending clear warnings to market participants. Previously, the courts had no clear precedent for prosecuting suspicious digital currency transactions.

Legal experts have noted the emphasis on the arbitration on the defendant’s knowledge of criminal origin. The court held that Liu understood the illegal nature of cash despite his denial. Even if the accused asserts ignorance, legal standards “we should have known” apply.

Escalating enforcement

Last year, the Beijing Court declared high-tech executives 14 years for adjusting a $19.5 million cryptocurrency washing scheme. Chinese courts have also been sentenced to gangs for money laundering using digital yuan, with prison conditions ranging from 7 to 16 months. Qingdao police have charged lawsuits involving USDT laundry of more than 8 million yuan.

China’s best-people prosecutors charged 2,971 people in 2023 money laundering, representing a 20-fold increase from 2019. In August 2024, China’s Supreme Court revised its anti-money laundering law to explicitly recognize crypto transactions as a money laundering method. Authorities are currently considering the amount of 5 million yuan to wash serious crimes under the law.

The precedent establishes more accurate boundaries for cryptocurrency trading in China’s restrictive regulatory environment. Market participants face increased legal risks when engaged in digital asset trading.

Chinese court rules first appeared in Beincrypto, saying they “should have known” the standards for crypto-laundry.