China -- AML/CFT Compliance Regulatory Overview

China bans all cryptocurrency transactions and prohibits virtual asset service providers (VASPs) from operating domestically, rendering traditional AML/KYC requirements inapplicable to crypto activities as they are illegal. [4] Instead, the focus is on enforcement against illicit crypto use through monitoring by financial institutions, with no licensing or registration for VASPs permitted. [1][4]

AML/CFT Legislation

China's AML framework stems from the Anti-Money Laundering Law of the People's Republic of China (2007, amended), supplemented by the Measures for the Administration of Anti-Money Laundering Internal Control of Financial Institutions (issued by the China Banking Regulatory Commission, now integrated into CBIRC). [5][8] These apply to traditional financial institutions (e.g., banks, payment providers), which must monitor for crypto-related money laundering links, but virtual currencies are explicitly flagged as high-risk channels for laundering. [4] Virtual assets are not regulated as legitimate services; bans include the 2021 joint notice from PBOC, CSRC, SAFE, and others prohibiting crypto trading and mining. [4]

Customer Due Diligence (CDD/KYC) Requirements

No specific KYC/CDD applies to VASPs or crypto users, as transactions are illegal and traditional KYC does not extend to banned activities. [4] Financial institutions must identify customers under Articles 5-9 of AML measures: rigorous ID verification at onboarding (including non-face-to-face), risk-based checks for high-risk clients, periodic reviews, and data retention for non-account holders in certain transactions. [5] Institutions monitor funds for virtual currency ties without endorsing crypto. [4]

Suspicious Transaction Reporting

Financial institutions report large-value and suspicious transactions (including potential crypto laundering) to authorities under Chapter IV of AML regulations, with a comprehensive online/offline system for detection. [4][5] No crypto-specific STR thresholds (e.g., unlike US $10k CTRs), but crypto flows must be transparent and traceable to evade capital controls. [1]

Record-Keeping Obligations

Institutions retain customer ID and transaction records (amounts, counterparties, currencies) for at least 5 years, accessible for investigations per Articles 10-11. [5] Crypto transaction details, if detected, must be shared with officials. [1]

Oversight Authority

• People’s Bank of China (PBOC): Leads AML policy, supervises institutions, conducts inspections (www.pbc.gov.cn). [5]
• China Banking and Insurance Regulatory Commission (CBIRC): Oversees banks/insurers (www.cbirc.gov.cn). [5]
• China Securities Regulatory Commission (CSRC): Regulates securities, enforces crypto fundraising bans (www.csrc.gov.cn). [4][5]
• Ministry of Public Security: Cracks down on crypto money laundering. [4]
• State Administration of Foreign Exchange (SAFE): Monitors cross-border crypto flows (www.safe.gov.cn). [4]

Note: Mainland China maintains a total crypto ban as of 2026; Hong Kong operates separately with VASP licensing under its Securities and Futures Commission (SFC), requiring AML/KYC (www.sfc.hk). [1][4] Search results lack post-2021 updates confirming any legalization.