On the morning of March 9, 2026, the second plenary session of the fourth meeting of the 14th National People's Congress was held at the Great Hall of the People in Beijing. Zhang Jun, President of the Supreme People's Court, stated clearly in his work report: To punish new types of crimes according to law, severely punish crimes such as money laundering and foreign exchange evasion mediated by virtual currencies, work together to prevent illegal cross-border capital transfers, and maintain national financial security and social stability.

The report shows that in 2025, the Supreme People's Court concluded over 31,900 cases, and courts at all levels concluded over 36 million cases.

2026, as the beginning year of the "14th Five-Year Plan", the nationwide public security economic investigation departments, guided by Xi Jinping's Thought on Socialism with Chinese Characteristics for a New Era, fully implement the spirit of the 20th National Congress of the Communist Party of China and previous plenary sessions of the 20th Central Committee, adhere to political leadership, legal support, and team guarantee, and regard the severe crackdown on illegal financial crimes related to virtual currencies as a core task. This marks the formation of a collaborative effort at the judicial and law enforcement levels, entering a phase of comprehensive normalization and heightened pressure against illegal activities involving virtual currencies. Currently, virtual currencies have become a major channel for "cleaning" criminal funds and illegal outflows. This article interprets the governance direction in conjunction with the regulatory situation and new criminal dynamics, and provides public prevention guidelines.

The national attitude is consistent: From tightening regulation to strict judicial penalties, comprehensive high-pressure governance

Virtual currencies are not a "no man's land". China’s regulation and crackdown on illegal financial activities related to virtual currencies have always been clear, firm, and progressively escalated.

1. Clear definition at the policy level

The central bank and multiple departments have issued documents multiple times clarifying that virtual currencies do not have legal currency status, and related activities such as exchange, trading, and intermediary services all fall under illegal financial activities that must be resolutely banned by law.

2. Continuous advancement of special actions

Across the country, actions to combat and govern money laundering illegal activities are ongoing, with virtual currency money laundering as a key target, covering the entire chain from capital flow, account control, platform investigation, to overseas tracing.

3. Strengthening judicial deterrence

The Supreme Court has continuously included virtual currency money laundering and foreign exchange evasion in its work reports, and courts in many places have already ruled on related cases, forming a judicial orientation of "evidence for conviction, strict sentencing," releasing a strong signal of "zero tolerance."

This year’s two sessions reiterated severe punishment, indicating that law enforcement is stricter, judicial precision is higher, and collaboration is stronger. Any behavior engaging in illegal financial activities using virtual currencies will face severe legal consequences.

Virtual currency money laundering crimes have escalated: more covert methods, broader harm

Under high-pressure regulation, the methods of money laundering and foreign exchange evasion through virtual currencies are continuously innovating, presenting characteristics of professionalism, chaining, and cross-border activity, with risks far exceeding traditional money laundering modes.

The specific new methods are as follows:

1. Hiding fund flows using decentralized tools

From early simple virtual currency transfers, it has evolved into a composite model of "decentralized exchanges (DEX) + mixers + cross-chain bridges," which do not require real-name verification. By mixing currencies to obscure fund tracks and splitting funds through cross-chain transfers, it makes it difficult for regulators to trace the source and destination of the funds, significantly increasing the difficulty of cracking down.

2. Using new concepts to disguise money laundering activities

From direct exchange of virtual currencies for money laundering to disguising as new concepts like NFTs, GameFi, RWA, and using "asset tokenization" and "high-yield investments" as bait to cover up the essence of money laundering, where tokenization of RWA can easily be misused as tools for capital outflow, making it highly deceptive.

3. Inducing ordinary users to assist in money laundering

From self-operating money laundering to using methods like "token trading," "proxy investment," "U collection," to pull ordinary users into the game, using high commissions as bait to lure users into collecting virtual currencies and transferring them, allowing them to unwittingly assist in illegal funds "cleaning," becoming accomplices in money laundering.

The social harm is multifaceted, specifically manifested as:

1. Irreversible financial losses

Illegal funds often flow abroad after being "cleaned" through virtual currencies, making it difficult to trace and low recovery rates. Once involved, property losses for individuals and institutions are basically unrecoverable.

2. Becoming tools for crime

Providing convenient funding channels for upstream crimes such as telecom fraud, online gambling, and illegal fundraising, amplifying the social harm of various illegal activities, disrupting social order.

3. Disturbing financial order

Evading foreign exchange regulation and illegally transferring assets across borders, disrupting the normal financial management system and impacting national financial security and economic stability.

4. Ordinary users are easily involved

Involvement in actions like "collecting virtual currencies," "token trading," and "proxy transfers," even if unaware, may constitute being accomplices in money laundering, requiring them to bear corresponding legal responsibilities.

Money laundering through virtual currencies is no longer an "industry gray behavior," but rather a clear criminal offense, and risks directly transfer to every participant.

Public prevention guide: Stay away from money laundering traps, safeguard legal and security bottom lines

In the face of ongoing upgraded judicial crackdowns and criminal methods, both individuals and institutions must raise their awareness and ensure not to participate, not to assist, and not to take chances. Specific prevention points are as follows:

1. Firmly refuse to participate in any illegal virtual currency activities

Do not engage in the exchange of virtual currencies with legal tender, do not collect and pay virtual currencies on behalf of others, and do not participate in suspicious activities like "token trading" or "arbitrage."

2. Beware of high-yield temptations and recognize money laundering schemes

Remain vigilant against statements like "low risk, high return," "instant collection," "guaranteed investment," and any requests for providing bank cards, wallet addresses, or mnemonic phrases, which carry extremely high risks.

3. Protect personal information and asset permissions

Do not casually disclose wallet private keys or mnemonic phrases, do not lend or rent accounts or collection codes, to avoid being exploited by criminals for money laundering.

4. Report suspicious clues in a timely manner

If encountering money laundering, illegal trading, fraud activities related to virtual currencies, proactively report to the public security and financial regulatory departments to jointly curb the spread of crime.

Introduction

The Supreme Court work report has again clarified: Virtual currencies are not a no man's land, and money laundering and foreign exchange evasion will be severely punished. From policy prohibition to judicial swords drawn, from source control to full chain crackdown, the national governance system for illegal crimes related to virtual currencies is becoming increasingly perfect, and the intensity of the crackdown continues to increase. Money laundering through virtual currencies seems covert, yet it is fully traceable, risks are predictable, and responsibilities can be pursued; any mentality of luck will bear a legal price.

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