China's Public Security Bureau Establishes New Regulatory Framework Against Illicit Use of Virtual Currency

DYORMaster · 2026-03-12T15:23:24+00:00

The Chinese Ministry of Public Security has released a new bill aimed at preventing cybercrime related to cryptocurrencies, marking a significant development in the country's regulatory approach. The bill explicitly prohibits various illegal activities involving cryptocurrencies and imposes strict limits on funding services to combat money laundering. This initiative signals China's commitment to a stricter regulatory environment around the cryptocurrency market.

DYORMaster

2026-03-12 15:23:24

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The Ministry of Public Security of China recently released a new bill related to cybercrime prevention and has begun soliciting public opinions. This regulatory framework introduces comprehensive measures to prevent cryptocurrencies from being used for illegal activities and reflects the progress of China’s cryptocurrency regulatory policies.

Actions Clearly Prohibited by the Bill

According to NS3.AI, the bill explicitly prohibits the following activities: individuals or organizations intentionally hiding, transferring, purchasing, or selling cryptocurrencies related to criminal activities. Notably, the bill clarifies and specifies the previously ambiguous stance on illegal use of cryptocurrencies.

Strict Restrictions on Fund Circulation Services

The regulation also bans the provision of fund circulation services using cryptocurrencies identified as originating from criminal sources. This is a key measure to prevent illegal fund transfers such as money laundering. Cryptocurrency exchanges and wallet service providers will likely need to establish stricter compliance systems based on this bill.

China’s Direction on Cryptocurrency Regulation

This bill signals China’s approach to the cryptocurrency market. It emphasizes not only trading restrictions but also cutting off links to criminal activities. Industry stakeholders and cryptocurrency users will need to adapt to a more stringent regulatory environment as the bill moves toward finalization and implementation.

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