Landmark Jilin Case Sets 2025 AML Crypto Enforcement Precedent

The Higher People's Court of Jilin Province disclosed a landmark case involving the laundering of over RMB 789,000 in proceeds from upstream telecommunications network fraud, marking one of the first judicial actions under China's revised Anti-Money Laundering (AML) framework. Four defendants were convicted for facilitating the conversion of illicit funds through a dual-layer scheme: purchasing gold to liquidate cash and transferring virtual currency via unregulated platforms. The court verified RMB 452,000 of the transactions as proceeds from fraud, resulting in sentences ranging from one to two years in prison and fines between RMB 10,000 and RMB 20,000. The ruling underscores China's intensified focus on virtual currency as a tool for financial crime, aligning with the 2025 implementation of stricter AML regulations that explicitly categorize crypto transactions as predicate offensesThe Jilin High Court disclosed a case involving the laundering of stolen funds through the use of virtual currency and gold.^[1].

The defendants’ methodology reflected a strategic use of both physical and digital assets to obscure the origin of funds. By leveraging gold transactions and virtual currency platforms, they circumvented traditional financial oversight mechanisms. This case highlights the growing sophistication of money laundering techniques in China, where regulators have identified cross-chain and cross-border crypto movements as high-risk vectors. The court’s emphasis on verifying transactional links to upstream crimes signals a shift toward granular forensic analysis in judicial proceedings, a trend observed in recent rulings where courts have applied the Civil Code’s provisions on void contracts to cryptocurrency-related disputesIt’s 2025. How do Chinese courts view virtual currency trading?^[2].

China’s legal system has increasingly treated virtual currency as a medium for illicit activity rather than a legitimate asset class. The 2025 AML Law, effective January 2025, expands the scope of predicate offenses to include crypto transactions, reflecting a broader regulatory strategy to combat financial crimes. The Jilin case exemplifies this approach, as the court explicitly tied the virtual currency transfers to upstream fraud, a critical distinction under the new legal framework. This aligns with the Supreme People’s Procuratorate’s directive to prioritize virtual currency in AML enforcement, emphasizing cross-agency coordination to address technological risksChina’s Supreme Procuratorate Outlines Crypto Focus in New AML Law^[3].

The ruling also reflects the challenges of prosecuting decentralized financial activities. While the defendants’ use of unregulated platforms complicated asset tracing, the court’s ability to verify RMB 452,000 as fraudulent proceeds demonstrates the efficacy of forensic blockchain analysis in judicial processes. This contrasts with earlier cases where courts dismissed crypto-related claims due to the illegality of transactions. The Jilin court’s willingness to attribute specific amounts to criminal activity suggests a maturing legal approach that balances strict regulatory compliance with practical enforcement toolsThe Jilin High Court disclosed a case involving the laundering of stolen funds through the use of virtual currency and gold.^[1].

Analysts note that the case may influence future judicial interpretations of virtual currency in civil and criminal contexts. The revised AML Law’s inclusion of crypto transactions as predicate offenses, combined with the court’s focus on transactional verification, could set precedents for prosecuting similar cases. However, challenges remain in addressing cross-border laundering through decentralized networks, where China’s enforcement capabilities are limited by jurisdictional and technical constraints. The court’s reliance on domestic evidence in the Jilin case highlights the need for enhanced international cooperation, a priority outlined in the 2025 AML LawChina Prepares to Tighten Crypto Regulations with Revised AML Laws by 2025^[4].