- China’s Supreme Court issued a warning in its annual work report on March 9.
- Courts will crack down on people who use virtual currencies to launder money or evade capital controls.
- It’s part of a broader push against abuses from AI and emerging technologies.
China’s Supreme People’s Court has pledged harsher penalties for individuals and organisations using cryptocurrency to launder money and illegally transfer funds across borders.
Chief Justice Zhang Jun issued the warning during the court’s annual work report to the National People’s Congress on Monday, according to local media outlet Sina Finance.
The announcement comes as Chinese courts handle a rising wave of technology-enabled crimes, from artificial intelligence-powered fraud to “human flesh search” doxxing attacks — a Chinese term for widespread crowdsourced efforts in which thousands of internet users collaborate to expose someone’s private information.
Moreover, by taking a zero-tolerance approach to crypto-facilitated financial crimes, Beijing signals an ongoing reticence to the use of cryptocurrencies at large.
In January 2026, Chainalysis revealed that Chinese-language money-laundering networks have processed around 20% of all illicit crypto funds over the past five years.
Must comply
Enforcement against crypto-related money laundering has intensified since Beijing banned crypto-trading and mining in 2021.
Despite that, criminals have found new ways to move funds offshore.
Virtual currencies allow Chinese citizens to skirt the country’s strict capital controls, which limit individuals to moving $50,000 per year out of the country.
Now Beijing is cracking down.
The Supreme Court’s work report emphasised that while China encourages technological innovation, applications “must comply with legal boundaries.”
Courts will “accurately grasp the ‘error tolerance’ space for technological innovation while promoting the standardised development of artificial intelligence,” the report stated.
Pedro Solimano is a markets correspondent based in Buenos Aires. Got a tip? Email him at psolimano@dlnews.com.
