China sentences trafficker to death after laundering ¥48M (~$7.04M) through crypto
China has handed a death sentence to a convicted drug trafficker after prosecutors found he laundered more than 48 million yuan (about $7.04 million) through virtual currency as part of a major cross‑border narcotics operation.
What happened
- Prosecutors in Chongqing, working under direct supervision from the Supreme People’s Procuratorate, say defendant Li Mobo converted cash and domestic bank transfers into digital assets to move illicit proceeds across borders and evade traditional banking oversight and capital controls. He was convicted of cross‑border drug smuggling, drug trafficking, drug transportation and money laundering.
- The death sentence was imposed under China’s combined punishment framework — a cumulative sentence for multiple convictions — and was not based solely on the money‑laundering charge.
Broader crackdown and enforcement push
- At a June 25 press conference the Supreme People’s Procuratorate said prosecutors intensified investigations into both “self money laundering” (traffickers converting their own proceeds) and “third‑party money laundering” (organized groups laundering money for others). Between January 2025 and May 2026, more than 1,200 people were prosecuted nationwide in these probes.
- The campaign prioritizes recovering drug‑related assets: authorities are tracing blockchain transactions, freezing illicit digital holdings, and pursuing both the underlying criminal networks and the financial channels that move their proceeds.
- The People’s Bank of China (PBOC) has reiterated that virtual currency money laundering is a top enforcement priority. Regulators say they’ve broadened investigations into professional laundering rings, cross‑border transfer networks, telecom fraud, online gambling, underground banking and crypto‑related financial crime.
- Chinese courts issued over 2,000 judgments under Article 191 of the Criminal Law during 2025, the PBOC added, as authorities step up enforcement cooperation, intelligence sharing and asset recovery in cases involving cross‑border financial crime.
What this means for the crypto sector
- The case highlights growing state capacity to trace and freeze crypto flows tied to criminal networks and signals heightened regulatory and prosecutorial attention on virtual‑currency use in illicit finance. For exchanges, custodians and crypto service providers operating within or with links to China, the message is clear: AML enforcement is intensifying, and both self‑laundering and third‑party laundering channels are targets of aggressive investigation.
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