Chinese police AI algorithm tracks bitcoin money laundering with 90% accuracy

Chinese police have developed an AI framework that detects bitcoin money laundering with nearly 90% accuracy, according to a study by researchers from the People's Public Security University of China. The system, which uses a memory module and large language model, aims to help regulators combat illicit cryptocurrency transactions and economic crimes.

Chinese police AI algorithm tracks bitcoin money laundering with 90% accuracy AI framework uses a memory module and large language model to detect pseudonymous cross-border illegal trading practices in crypto crackdown Chao Kong /author/chao-kong in Beijing cryptocurrency transactions https://www.scmp.com/news/china/science/article/3359070/how-do-chinese-police-track-and-seize-cryptocurrency-rare-paper-reveals-forensic-tools?module=inline&pgtype=article with nearly 90 per cent overall accuracy, according to a recent study. Cryptocurrency transactions are growing rapidly, but their pseudonymous and cross-border nature can provide channels for money laundering and other illegal activities. cryptocurrency https://www.scmp.com/topics/cryptocurrency?module=inline&pgtype=article transactions”. It also “provides an innovative technological pathway for regulatory authorities to combat illicit cryptocurrency transactions and economic crimes”, Sun, a researcher specialising in criminal investigation and cybersecurity, wrote. The May study, conducted by researchers from the People’s Public Security University of China, which is affiliated with the Ministry of Public Security, comes as authorities continue to focus on cryptocurrency-linked financial crime. In March, the Supreme People’s Procuratorate reported that prosecutors indicted 3,259 people in 2025 for money laundering involving virtual currencies and underground banks.