China Introduces 5-Point Strategy to Enforce Crypto AML Measures

Richard M.

October 23, 2023

3 minutes read

China’s newly appointed governor of the Central Bank emphasised the AML regulations to safeguard financial institutes and proposed the latest five-point strategy to regulate the crypto industry.

The Central Bank of China governor, Pan Gongsheng, introduced a five-point strategy to combat money laundering and terrorist financing in crypto transactions. The strategy aims to protect investors from scammers, fake gold exchange programmes, counterfeit trading platforms, and unlawful fundraising. China previously attempted various steps to regulate crypto, including a crackdown on illegal cryptocurrency platforms, strict compliance with the AML regulations, and the development of their own digital currency, DECP. These are some rigorous initiatives China takes to enhance virtual asset security.

However, China’s Central Bank governor is taking the following steps to strengthen financial institution stability. The Governor promised to prevent China from unlawful funding and money laundering, as well as manipulation in the crypto transactions. Pan Gongsheng, emphasised his administration follows the regulatory measures by stressing the need for all financial institutes to develop rigorous business verification and risk assessment before licenced crypto platforms. The Governor also encouraged financial institutions to make efforts to identify suspicious transactions and take necessary measures to prevent them. He also warned that any institutions found in violation of regulations would be punished and penalised harshly.

China’s continuing efforts to control the financial sector’s illegal activities are consistent with the central bank’s new policy approach. China should implement some actions to keep a tight hold on the financial industry, such as tightening KYC and AML procedures and controlling financial market activities. The governor’s statement came when the government fought against all the crypto traders and miners, both prohibited in China.

Trading cryptocurrency in China has been banned since 2017, although Chinese investors use foreign platforms for crypto transactions and exchange currency with virtual assets. The Chinese government has also taken steps to prevent its citizens from using virtual assets for payments or investments. It has also imposed strict penalties on those who defy the ban. Furthermore, Chinese authorities have cracked down on cryptocurrency exchanges and trading platforms, making it difficult for Chinese citizens to buy and sell virtual assets.

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