In recent years, more and more online platforms have been used to launder money through virtual rewards via live streaming and gaming.
Virtual currencies, gaming coins, internet platforms and live streaming payments have become new money laundering channels and have more complex and hidden network and chain-like features, the statement said.
In February, authorities in Shanghai charged four live streamers with money laundering after they exchanged virtual gifts and rewards that were part of an illegal donation scheme totaling 1.2 billion yuan ($168 million).
The crackdown on money laundering has been further tightened
In 2021, authorities in Shanghai also discovered that an “underground bank” had illegally exchanged 2.5 billion yuan worth of foreign currency over a six-year period using game cards – prepaid cards that allow users to purchase virtual currencies for online games.
Regulators have sought to overhaul China’s anti-money laundering laws to more effectively combat illegal activities and address the risks associated with virtual assets.
A draft amendment to the Anti-Money Laundering Law, which was passed in 2006 and came into force in 2007, was discussed at a State Council meeting chaired by Premier Li Qiang in January; the law was later submitted to the national parliament for consideration.
In 2023, 2,971 people were prosecuted for money laundering, a nearly 20-fold increase from 2019, Zhang Jianzhong, an official at the top procuratorate, said on Monday.
Zhang added that 1,391 people were prosecuted for money laundering in the first half of 2024, an increase of 28.4 percent year-on-year.
“The crackdown on money laundering has continued to be tightened,” Zhang said.
02:50
China’s live streaming industry is experiencing a boom as millions of aspiring presenters vie for a breakthrough in the industry
China’s live streaming industry is experiencing a boom as millions of aspiring presenters vie for a breakthrough in the industry
Other changes announced on Monday included clearer guidelines on “serious circumstances” in money laundering cases, such as refusing to cooperate with authorities or when the amount laundered is more than five million yuan.
Perpetrators face prison sentences of between five and ten years and a fine of at least 200,000 yuan (US$28,000).
Criminals use virtual currencies and gaming coins to transfer money across China’s borders through underground banks, making it difficult to investigate and prosecute these cases, the statement said. In addition, the transaction amounts are often significant.
Smuggling, corruption and bribery, as well as financial crimes through cross-border asset transfers, were among the most frequently investigated money laundering cases by authorities between 2022 and 2023, the Supreme People’s Court said in a statement.
The Chinese central bank had previously urged banks and mobile payment providers to be vigilant and stop offering services related to virtual currency activities.
Prosecutors in cities such as Beijing, Zhejiang, Fujian, Henan and Hubei have actively cooperated with relevant authorities to strengthen coordination between law enforcement and anti-money laundering through measures such as information sharing, regular joint meetings and the establishment of a financial justice coordination center.
