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Following ongoing hacks and money laundering use in this rapidly evolving cryptocurrency industry is heavily affecting investors and the government to take action on it. In response to this Anti-Money Laundering (AML) expert, Wang Xin acknowledges the challenge of its broad scope, suggesting a need for a wide framework. He also highlights the urgency of addressing money laundering involving virtual assets as a top priority. Rising Cryptocurrency money laundering trends in China 
According to the local news media, Yan Lixin executive director of the China Anti-Money Laundering Research Center at Fudan University with local media highlights the risingtrend of using cryptocurrency for money laundering in China, highlighting the lack of clear legal definitions for virtual assets. Yan also made a statement to the local media, that. 
“Both money laundering and anti-money laundering have become asymmetric forces that can influence, control, and even ‘invade’ a country or region. In this sense, it has been upgraded to a non-traditional weapon. Therefore, for most countries, In other words, the financial security challenges we face are severe.” China’s regulatory response to digital financial risks 
However, <a href="https://news.todayq.com/china-protects-nft-holders-by-introducing-anti-theft-laws/" rel="noopener noreferrer nofollow">China’s stance on virtual currencies</a>, evident in the Bitcoin ban, aims to prevent digital financial risks. The revised draft addresses new money laundering risks by requiring financial institutions to assess and manage these risks associated with new technologies and products.
Yan Lixin points out that while the revised draft includes prevention measures, it lacks operational guidance for the subsequent seizure, freezing, deduction, and confiscation of virtual asset money laundering crimes. This gap creates “grey areas,” posing challenges for law enforcement.
He also cites flaws in judicial relief work related to anti-money laundering enforcement, highlighting the need to protect citizens’ rights. Instances of financial accounts being wrongly “closed,” “frozen,” or “deducted” highlight the necessity for improved relief mechanisms and appeal processes.
Yan Lixin proposes establishing a clear system involving regulatory authorities, financial institutions, industry associations, financial consumer rights protection, and independent third parties to address these issues. This network would ensure transparency, complaint channels, correction mechanisms, and relief processes.
Wang Xin highlights the importance of a compliance management system within the Anti-Money Laundering Law. Integrating anti-money laundering compliance requirements will pave the way for implementing guiding documents and rules.
Furthermore, Yan Lixin points out the need for an improved financial intelligence network in China. With the absence of branches outside Shanghai, addressing regional demands for financial intelligence is essential for maintaining economic, financial, and social stability. The revision of anti-money laundering laws and institutional reforms offers an opportunity to enhance systemic fund monitoring capabilities strategically.
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