China’s Supreme People’s Procuratorate, the country’s highest prosecution authority, just told its prosecutors to stop playing defense on crypto crime. New recommendations released on July 12 call for proactive investigation of cryptocurrency-related money laundering, complete with updated evidentiary standards that could fundamentally change how cases are built and prosecuted.

The proposals, articulated by Hunan Province prosecutors and a law professor in the official Procuratorate Daily, introduce a straightforward but aggressive principle: if someone uses a mixer, transacts with privacy coins, or sells crypto assets at non-market prices, that alone may constitute sufficient evidence of criminal intent. In English: the tools designed for financial privacy are now being treated as smoking guns.

The ‘one case, two checks’ framework

At the center of the new guidance sits a proposed investigative principle called “one case, two checks.” Every major crime case that crosses a prosecutor’s desk should automatically trigger a secondary review for potential money laundering elements. Investigators working a fraud case, a corruption probe, or a drug trafficking bust would now be expected to specifically look for crypto-based laundering regardless of whether digital assets were initially flagged in the case.

The proposals also push for a significant shift in how blockchain evidence is handled. Prosecutors want blockchain data to carry a presumption of reliability in court, which would flip the traditional burden of proof. Once prosecutors present their transaction analysis, the defense would need to demonstrate that the data is unreliable or the interpretation is wrong, rather than prosecutors needing to prove the data’s authenticity from scratch.

These recommendations don’t carry immediate legal force. They’re guidelines, not statutes. But in China’s legal system, pronouncements from the SPP carry enormous practical weight, shaping how prosecutors across the country prioritize and structure their cases.

A $16.1 billion problem

China banned crypto trading and mining in 2021, but that ban hasn’t exactly dried up the underground market. According to Chainalysis data, Chinese-language criminal networks processed over $16.1 billion in illicit cryptocurrency funds in 2025. That figure represented more than 20% of the global total for crypto-linked illicit finance.

In 2024 alone, more than 3,000 individuals were prosecuted in crypto-related money laundering cases across China. Revisions that same year set new thresholds for aggravated laundering offenses, targeting transactions exceeding 5 million RMB, roughly $690,000 at current exchange rates.

Yet prosecutors have repeatedly run into practical walls. The trading ban itself creates a paradox for asset confiscation. When authorities seize crypto, they can’t easily liquidate it through domestic channels because those channels are illegal. The new proposals acknowledge this directly, advocating for a state-managed platform specifically designed for storing and valuing seized digital assets.

International cooperation and privacy coin implications

The SPP’s recommendations also emphasize enhanced international judicial cooperation for asset tracing. The proposals also signal that China’s enforcement apparatus is investing in capability, not just rhetoric, with the state-managed asset platform and international cooperation frameworks suggesting a longer-term infrastructure buildout for sustained prosecution efforts.

For the crypto market, the privacy coin angle deserves particular attention. When one of the world’s largest economies starts treating mixer usage and privacy-focused transactions as presumptive evidence of crime, the regulatory risk calculus changes for everyone building or investing in those technologies. Monero, Zcash, and similar assets already face delisting pressure from exchanges trying to stay compliant with various jurisdictions.

The proposed evidentiary reforms also matter beyond China’s borders. If blockchain data gains a presumption of reliability in Chinese courts, it creates a template that other jurisdictions could adopt. China’s approach, shifting that burden to defendants, offers a model that prosecution offices elsewhere might find attractive.