China Considers Treating Crypto Mixer Use as Sign of Money Laundering

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Chinese prosecutors have proposed treating the use of cryptocurrency mixers and privacy coins as evidence of potential money laundering, to strengthen the country's approach to investigating crypto-related financial crimes.

The proposals were published in The Procuratorial Daily, the official newspaper of China's Supreme People's Procuratorate. The piece argues that the investigators should presume criminal intent when suspects use tools that obscure transaction histories, such as privacy-focused cryptocurrencies and certain decentralized trading methods.

The article also calls for updated standards for blockchain evidence, as well as closer cooperation between law enforcement agencies and blockchain analytics providers. On top of that, the authors call for creating a government platform that would help manage and dispose of seized cryptocurrency. 

According to the authors, existing legal procedures aren’t able to keep up with the growing use of digital assets in criminal investigations.

China banned cryptocurrency trading and mining in 2021, but authorities continue to investigate cases that involve virtual assets, in particular, those linked to illegal fundraising and cross-border money laundering. Chinese police have shut down major crime rings, including a money laundering operation worth $1.7 billion in 2022. According to reports, Chinese laundering networks processed about $16 billion in 2025 and now handle roughly 20% of all crypto money laundering worldwide.