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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
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Chao Kongin BeijingPublished: 10:00am, 2 Aug 2026Researchers from China’s national police academy have developed an AI framework that can detect illicit cryptocurrency transactions 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.
In an article published in the peer-reviewed Chinese publication Journal of Intelligence, corresponding author Dr Sun Jingchao wrote that the study “provides a precise, generalisable and interpretable solution for detecting illicit cryptocurrency 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.
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