Three authors, two serving district-level prosecutors and one law professor, laid out their proposals in the Procuratorate Daily on July 12 and 13, 2026. The paper carries no binding legal authority, but the publication is the official outlet of China's Supreme People's Procuratorate and opinions published there by working prosecutors are widely read as signals of the direction enforcement is heading. The authors argue that China's existing criminal statutes were designed around traditional financial institutions and cannot adequately address blockchain-based transactions. Because the Criminal Law's money laundering provisions are narrowly drawn, prosecutors have long relied on broad "concealment" charges as a workaround. The framework proposals are partly intended to close that gap. China's 2024 revision of its Anti-Money Laundering Law also established a beneficial ownership reporting system aimed at combating shell-company layering schemes, providing further regulatory context for the proposals now under discussion.

What the Paper Proposes

Yang Yingjie, Guo Shaoyou, and Liu Xinqi identify three concrete problems prosecutors face right now: deciding which charges to bring in crypto-related cases, getting blockchain evidence admitted in court, and recovering digital assets that have moved across wallets and jurisdictions. On the evidence question, the authors argue that blockchain records confirmed through public explorers and matching cryptographic hashes should be treated as presumptively authentic. Courts, they write, should infer money laundering intent when suspects use coin mixers (services that obscure the origin of funds by pooling transactions) or privacy coins without offering a credible counter-explanation. The same standard of suspicion would apply to large crypto sales at prices that are "obviously unreasonable" and to patterns of high-frequency anonymous transfers.

The paper also surfaces a less-discussed operational problem. China banned crypto trading in 2021 and tightened that ban further in June 2025 under a comprehensive People's Bank of China order that also covered mining. In a separate action in February 2026, the PBOC coordinated with 12 other agencies to extend regulatory coverage to offshore stablecoins and tokenized assets, explicitly flagging USDT as a risk. Because of those prohibitions, authorities currently have no compliant way to sell seized digital assets. The authors flag this as an urgent gap that needs a legal resolution.

Scale of the Problem

The numbers behind these proposals are substantial. Chainalysis, the blockchain analytics firm, reported in January 2026 that Chinese-language money laundering networks moved roughly $16.1 billion in illicit crypto during 2025, accounting for about 20 percent of the $82 billion in total illicit crypto flows tracked globally that year. That works out to approximately $44 million per day. These networks operate through several overlapping infrastructure types: Telegram-based platforms that function as informal escrow services connecting launderers with clients across multiple jurisdictions, over-the-counter trading desks, and gambling services. Tether (USDT), the dollar-pegged stablecoin, dominates the transaction flows because its stable price removes the volatility risk that comes with moving large sums in Bitcoin or Ether.

China's prosecutors are already moving on this at scale. At a press conference on June 25, 2026, the Supreme People's Procuratorate said it had charged more than 1,200 people with money laundering connected to drug trafficking between January 2025 and May 2026. More than 3,000 people were charged with crypto-related money laundering across all crime categories in 2024 alone, and more than 2,000 convictions on crypto money laundering charges were recorded in 2025. In one case, police seized $1.7 billion worth of Tether in a single enforcement action, according to reports. The framework proposals follow the 2026 arrest of the former chairman of Huione Group, a company linked to a multi-billion-dollar laundering network tied to online fraud operations across Southeast Asia.

Regional Exposure Beyond China

The implications extend well past China's borders. Chainalysis researchers found Telegram posts from these networks explicitly claiming to operate "fleets" across Africa, a concern for fast-growing USDT markets in Nigeria, Kenya, and Ethiopia where regulatory infrastructure for crypto forensics is still being built. In South Asia, vendors on these Telegram channels advertise cross-border fiat settlement capacity through informal corridors that overlap with Pakistani, Indian, Bangladeshi, and UAE over-the-counter trading desks. The UAE is a high-profile jurisdiction in global anti-money laundering enforcement, and its inclusion in these corridors is likely to draw particular regulatory attention. Chinese-language criminal networks have also been relocating operational hubs to Cambodia, Myanmar, and other Southeast Asian jurisdictions as domestic pressure increases, and a sharper Chinese enforcement posture could push them to fragment further across the region, complicating detection.

The paper's authors also call explicitly for international agreements covering cross-border crypto investigations, asset freezes, and blockchain intelligence sharing. If those proposals progress toward formal law, they could form the basis for new bilateral cooperation frameworks and potentially align with multilateral bodies such as the Financial Action Task Force. Africa-focused bodies including ESAAMLG (the Eastern and Southern Africa Anti-Money Laundering Group) and GIABA (the Inter-Governmental Action Group against Money Laundering in West Africa) have also been identified as potentially relevant multilateral partners should China's framework be formalized.

What Comes Next

China's legal history offers a relevant precedent. The 2021 crypto ban moved from early institutional signaling to binding multi-ministry policy within months, illustrating how quickly enforcement signals can translate into formal rule in the Chinese system. The current paper has no legal force, but it represents a formal signal from within the official prosecutorial apparatus. The authors are calling for changes to China's criminal law framework, a process that moves slowly in formal terms but often accelerates once institutional consensus forms.