China issues death sentence in $7M crypto-laundering narcotics case

The verdict, delivered in Chongqing, follows a broader crackdown by the Supreme People’s Procuratorate. Officials report that between January 2025 and May 2026, authorities prosecuted over 1,200 individuals for drug-related money laundering. Li’s sentence was handed down under a combined punishment framework, accounting for his role in cross-border drug smuggling, trafficking, and transportation alongside the financial concealment of his profits.

Prosecutors describe a methodology where the criminal network systematically converted cash and domestic bank transfers into virtual assets to bypass capital controls and traditional banking oversight. This case serves as a template for new enforcement tactics, as Deputy Chief Procurator Miao Shengming confirmed that investigators are now prioritizing blockchain tracing to freeze digital assets in real-time.

The People’s Bank of China has signaled that virtual currency laundering is now a principal enforcement priority. Courts have issued more than 2,000 judgments under Article 191 of the Criminal Law throughout 2025, signaling a shift toward aggressive prosecution of both independent traffickers and organized third-party laundering syndicates.