China has sentenced a convicted drug trafficker to death after prosecutors found he laundered more than 48 million yuan (approximately $7.04 million) through cryptocurrency as part of a major cross-border narcotics operation. According to the Supreme People's Procuratorate, defendant Li Mobo laundered the funds through virtual currency before being convicted of cross-border drug smuggling, drug trafficking, drug transportation, and money laundering. The death sentence was imposed under China's combined punishment framework, which allows multiple convictions to be sentenced together, though it was not based solely on the money laundering offense.
China has outlined comprehensive plans to strengthen anti-money laundering enforcement and expand scrutiny of virtual currency-related crime as authorities prepare the country's financial security framework for the next five-year policy cycle. According to reports from The People's Bank of China, authorities will intensify action against virtual currency laundering, cross-border money laundering networks, and other financial crimes under their anti-money laundering framework. The central bank stated that China has entered a new stage of anti-money laundering development after completing a series of legal, regulatory, enforcement, and international cooperation initiatives over the past five years.
The People's Bank of China reported significant enforcement success in 2025, with courts across China issuing more than 2,000 judgments under Article 191 of the Criminal Law, the country's money laundering offense provision. As reported by The People's Bank of China, authorities have intensified action against money laundering crimes through a joint campaign launched in 2022 by the central bank, the Ministry of Public Security, and nine other government agencies. The Supreme People's Procuratorate disclosed that prosecutors have intensified investigations into both 'self money laundering' and 'third party money laundering' tied to drug crimes, leading to the prosecution of more than 1,200 people nationwide between January 2025 and May 2026. According to recent reports, illicit crypto laundering is estimated at $82 billion globally, with Chinese networks accounting for $16.1 billion of this total.
The People's Bank of China identified virtual currency laundering as a key enforcement priority, noting that criminals increasingly use virtual currencies, underground banks, and new technologies to conceal and move illicit funds. According to the Supreme People's Procuratorate, the criminal network in the Chongqing case used cryptocurrency to convert cash and domestic bank transfers into digital assets, allowing more than 48 million yuan to move across borders while avoiding traditional banking oversight and capital controls. Deputy Chief Procurator Miao Shengming stated that prosecutors have expanded enforcement against both traffickers who convert their own criminal proceeds into cryptocurrency and organized groups that provide laundering services to others. The central bank warned that emerging technologies and new business models have provided additional channels that can be abused for money transfers, making detection and transaction tracing more difficult.
China completed a major revision of its Anti-Money Laundering Law, which took effect in 2025, formally adopting a risk-based approach and introducing requirements for monitoring money laundering threats linked to new technologies and emerging sectors. As reported by The People's Bank of China, authorities established a national beneficial ownership reporting system in 2024 through measures jointly issued by the People's Bank of China and the State Administration for Market Regulation. The system is described as an important tool for preventing shell companies from being used to conceal illicit activity, with regulators later introducing new rules requiring financial institutions to identify and verify beneficial owners of customers. This comprehensive regulatory framework demonstrates China's commitment to maintaining strict oversight of financial activities while expanding its digital currency infrastructure.
Chinese authorities are prioritizing the recovery of drug-related assets by tracing blockchain transactions and freezing illicit digital holdings connected to criminal organizations. According to the Supreme People's Procuratorate, the campaign has focused on recovering assets linked to narcotics offenses and ensuring that every identified drug-related money laundering case faces investigation and prosecution. The People's Bank of China announced that virtual currency money laundering remains one of its principal enforcement priorities under the country's anti-money laundering strategy. However, there are signs of potential regulatory evolution, as Wang Xin, director-general of the Research Bureau at the PBOC, indicated at the Lujiazui Forum on June 17 that stablecoins "could assume a larger role in international payments in the future" and called for regulatory coordination and international cooperation, representing a notable concession from a central bank that has otherwise spent five years tightening crypto regulation perimeters.
