Huo Xing Cai Jing reports that on August 2, researchers from the People’s Public Security University of China developed an AI framework capable of detecting illegal cryptocurrency transactions with nearly 90% overall accuracy. The study was published in the Chinese peer-reviewed journal *Journal of Intelligence*. Dr. Sun Jingchao, the corresponding author specializing in criminal investigation and cybersecurity, stated that the research “provides a precise, scalable, and interpretable solution for detecting illegal cryptocurrency transactions” and offers “an innovative technological pathway for regulatory authorities to combat illegal cryptocurrency transactions and economic crimes.” The AI framework leverages memory modules and large language models to specifically identify cryptocurrency’s anonymity and cross-border characteristics, enabling the tracking of illicit activities such as money laundering. This research comes at a time when China is intensifying its efforts to crack down on cryptocurrency-related financial crimes. In March this year, the Supreme People’s Procuratorate disclosed that Chinese prosecutors had brought charges against 3,259 individuals in 2025 for money laundering crimes involving virtual currencies and underground banking networks. As cryptocurrency transaction volumes continue to grow rapidly, the anonymity and cross-border nature of these transactions have created channels for illicit fund flows. This self-developed AI detection tool by law enforcement marks a shift in regulatory technology from passive tracking to proactive intelligent identification.
Chinese researchers develop AI algorithm to track Bitcoin money laundering with ~90% accuracy
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Summary
Chinese researchers have developed an AI algorithm to enhance AML and CFT efforts by tracking Bitcoin money laundering with nearly 90% accuracy. The team from the Chinese People’s Public Security University used memory modules and large language models to detect anonymous and cross-border transactions. Published in the *Journal of Intelligence*, the framework assists regulators in identifying suspicious activity. In 2025, 3,259 individuals were prosecuted for virtual currency-related money laundering in China.
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