China's Supreme People's Court has pledged to impose significantly harsher penalties on individuals and organizations using cryptocurrency for money laundering and illegal cross-border fund transfers. The warning was delivered by Chief Justice Zhang Jun during the court's annual work report to the National People's Congress on March 10, 2026.
The announcement signals a critical escalation in China's regulatory crackdown on crypto-facilitated financial crimes, reinforcing Beijing's zero-tolerance stance towards the use of digital assets to circumvent its strict capital controls, which limit individuals to moving $50,000 per year out of the country. The court's report emphasized that while China encourages technological innovation, all applications "must comply with legal boundaries."
This judicial warning comes amid a rising wave of technology-enabled crimes in Chinese courts, including AI-powered fraud. The report also stated courts will "accurately grasp the 'error tolerance' space for technological innovation while promoting the standardised development of artificial intelligence."
The move is part of a broader regulatory evolution. Enforcement against crypto-related money laundering has intensified since Beijing banned crypto trading and mining in 2021. A January 2026 report from blockchain analytics firm Chainalysis revealed that Chinese-language money-laundering networks have processed approximately 20% of all illicit crypto funds over the preceding five years, highlighting the scale of the issue authorities aim to address.
