China's Supreme People's Court has warned of stricter penalties for using cryptocurrencies to launder money and evade capital controls. Chief Justice Zhang Jun made the statement in the court's annual report to the National People's Congress on March 9. The move reflects Beijing's ongoing crackdown on technology-enabled financial crimes.
On March 9, Chief Justice Zhang Jun presented the Supreme People's Court's annual work report to the National People's Congress, highlighting a commitment to harsher penalties for individuals and organizations involved in cryptocurrency-related financial crimes. According to local media outlet Sina Finance, the court aims to target those using virtual currencies to launder money or illegally transfer funds across borders, amid efforts to enforce China's strict capital controls that limit individuals to $50,000 annually for outbound transfers.
This warning forms part of a broader initiative against abuses involving emerging technologies, including artificial intelligence-powered fraud and "human flesh search" doxxing attacks, where internet users collaborate to expose private information. The report emphasized that while China supports technological innovation, such applications "must comply with legal boundaries." Courts are instructed to "accurately grasp the ‘error tolerance’ space for technological innovation while promoting the standardised development of artificial intelligence."
Enforcement has ramped up since Beijing's 2021 ban on crypto trading and mining, yet criminals continue to exploit virtual currencies to move funds offshore. A January 2026 report from Chainalysis indicated that Chinese-language money-laundering networks handled about 20% of all illicit crypto funds over the previous five years. Beijing's zero-tolerance stance underscores its reticence toward cryptocurrencies in general, signaling continued regulatory pressure on such activities.
