What’s new: A senior official of China’s central bank suggested establishing a governance mechanism to combat money laundering using virtual assets in the digital era.
With natural isolation from the real world and the nature of interconnectivity, virtual assets can easily become a money laundering tool for criminals, Gou Wenjun, director of the Anti-Money Laundering Monitoring and Analysis Center of the People’s Bank of China (PBOC), said at a financial security summit.
The central bank’s anti-money laundering center has been focusing on monitoring money laundering using virtual assets and has assisted law enforcement authorities to crack dozens of criminal cases, Gou said.
Virtual assets refer to any digital representation of value that can be digitally traded, transferred or used for payment, using cryptography, distributed ledger accounts or similar technologies and existing in addition to legal currencies and financial products with a real basis, Gou said. The development of virtual assets will go beyond current forms including cryptocurrencies, non-fungible tokens and various items in the metaverse, he said.
He said the PBOC will continue to deepen information-sharing and cooperation with 60 overseas financial intelligence agencies to support law enforcement authorities in tracking down criminals and recovering stolen assets involving virtual assets.
The background: China is one of the first countries in the world to crack down on cryptocurrencies. Trading of cryptocurrencies has officially been banned in China since 2019, but Chinese citizens have been able to continue transactions online through foreign exchanges.
Crypto-related transactions will be considered illicit financial activity, including services provided by offshore exchanges, according to a notice published Sept. 24 by 10 government agencies including the central bank, the top court, and market and cyberspace regulators.
Since September, virtual asset transactions have decreased significantly, but there are still many individuals who participate in virtual asset transactions through overseas accounts, forming an underground cross-border industry chain, Gou said.
“There is a long way to go to govern the crime of virtual asset money laundering,” he said.
Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (hello@caixin.com)
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