Cracking money laundering directly through mixers! China’s Supreme People’s Procuratorate discusses virtual currency crimes, urging the establishment of a “self-authentication of on-chain data” rule

China’s official crackdown on cryptocurrency-related crimes is facing a major escalation. According to the latest theoretical article published on the website of the Supreme People’s Procuratorate of the People’s Republic of China on the 12th, current criminal law encounters three major dilemmas—misclassification, verification, and asset recovery—when addressing virtual currency money laundering. To address this, experts, in a written submission, recommend establishing an evidence rule of “self-verification of blockchain data,” and also advocate building a “national-level virtual currency custody and disposal platform” and a cross-border “judicial cooperation chain,” so as to solve enforcement challenges through a systematic framework.
(Background recap: China reportedly clears Alibaba, ByteDance, and DeepSeek to purchase NVIDIA H200 chips; Trump loosened regulations for half a year, and it was finally approved.)
(Background supplement: China achieved “sea-based rocket recovery” and flew it directly into the big net—what is the difference from Spacex?)

Table of contents

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• Misclassification dilemma: “concealment crime” becomes a catch-all crime, calling for double review in one case
• Verification dilemma: promoting “on-chain data self-verification” and subjective knowledge presumptions
• Asset recovery dilemma: advocating a national-level disposal platform and a “judicial cooperation chain”

With the rapid evolution of blockchain technology, the decentralization, anonymity, and borderless circulation features of virtual currencies have become a hotbed for money-laundering crimes worldwide. In response to increasingly severe regulatory challenges, China’s judicial system is seeking a breakthrough governance framework.

According to the theoretical article titled “Systematically Cracking the Regulatory Dilemma of Criminal Law Measures for Regulating Criminal Offenses Involving the Use of Virtual Currency to Launder Money,” published on July 12, 2026 on the “Theoretical Research” section of the website of the Supreme People’s Procuratorate of the People’s Republic of China, a team composed of legal experts from the Xiangtan Municipal Procuratorate and Xiangtan University conducted an in-depth analysis of China’s “misclassification, verification, and asset recovery” threefold dilemmas in combating such crimes, and proposed a specific and paradigm-shifting response blueprint.

Misclassification dilemma: “concealment crime” becomes a catch-all crime, calling for double review in one case

The article first points out that, in China’s current judicial practice, there is a serious mismatch in the “classification of conduct” for crimes of virtual currency money laundering. Because Article 191 of China’s Criminal Law strictly confines the “crime of money laundering” to seven categories of specific predicate crimes, many acts of laundering proceeds obtained from crimes that do not fall within the seven categories are forced to be handled under Article 312 of the Criminal Law—“the crime of concealing or disguising proceeds of crime (commonly referred to as the concealment crime)”—which has led to the “catch-all” misuse of the concealment crime.

To resolve this dilemma, the article suggests that the judicial system should shift from passive identification to active review. Investigation authorities should strictly implement the “double review in one case” mechanism and proactively issue capital-flow analysis reports; procuratorial authorities should focus on reviewing the substantive purpose of capital transfers. For independent “whitening” conduct involving encrypted currencies, prosecutors should firmly add charges for money laundering crimes, and—by optimizing the procuratorial performance evaluation system—improve the rate at which money laundering cases are filed independently.

Verification dilemma: promoting “on-chain data self-verification” and subjective knowledge presumptions

In terms of verifying crimes, offenders often use mixers, privacy coins, and decentralized exchanges (DEXs) to conduct multi-layer splitting and cross-chain transfers, leaving investigative and evidentiary authorities facing the dilemma of “difficulty in collecting evidence, difficulty in authenticating, and difficulty in proving.”

To address this, experts boldly propose exploring new evidence rules at the level of procedural law. First, establish the principle of “self-verification of blockchain data”: as long as on-chain transaction records can be verified through public blockchain explorers and the hash values (Hash) match, their authenticity can be preliminarily recognized, shifting the burden of proof to the party raising the challenge. In addition, the article also advocates establishing a “presumption of subjective knowledge” rule: if a suspect uses a mixer or a privacy coin, or rapidly disposes of a large amount of virtual currency at an unreasonable price, it can be directly presumed that the suspect had the intent to launder money.

Asset recovery dilemma: advocating a national-level disposal platform and a “judicial cooperation chain”

In the end, the article highlights what it considers the most troublesome problem of “recovering losses and making reparation” in China’s current judicial practice. Because China’s financial regulatory stance clearly adopts a position of “prohibiting circulation,” after law enforcement agencies seize virtual currencies, they enter a vacuum state due to the lack of compliant channels for monetization, difficulty in safeguarding private keys, and the absence of standardized criteria for valuing coins.

To address this, the article proposes a solution to build an integrated framework of “domestic coordination and international linkage.” At the national level, it calls for issuing disposal procedures for the virtual currencies involved in cases and building a “national-level virtual currency custody and disposal platform.” Monetization can be carried out through compliant channels such as targeted auctions or agreed transfers, while also establishing a dynamic valuation expert committee to ensure fair pricing.

For international linkage, the article suggests that China should actively sign international judicial assistance agreements for crimes involving virtual currencies, and support building a “judicial cooperation chain” based on blockchain technology, so as to achieve cross-border sharing of suspicious address alerts and freeze orders. This in-depth report not only identifies pain points in the current system, but if the national-level disposal platform it advocates is implemented, it may profoundly change China’s strategic landscape for handling encrypted assets involved in future cases.