Researchers at the People’s Public Security University of China have developed an AI framework that can detect illegal cryptocurrency transactions with overall accuracy close to 90%, according to a report cited by ChainCatcher. The study was published in the Chinese peer-reviewed journal Intelligence Magazine. Sun Jingchao, the corresponding author and a researcher focused on criminal investigation and cybersecurity, said the work offers an accurate, scalable and interpretable solution for identifying illicit crypto activity, while also giving regulators a new technical route for tackling economic crimes tied to digital assets.
The framework uses a memory module and a large language model to identify patterns linked to crypto’s anonymity and cross-border nature, with the aim of tracing illegal activity such as money laundering. Its release comes as Chinese authorities continue to intensify enforcement against financial crimes involving cryptocurrencies. In March this year, China’s Supreme People’s Procuratorate said prosecutors had charged 3,259 people in 2025 in money-laundering cases involving virtual currencies and underground banks.
Researchers at the People’s Public Security University of China have developed an AI framework that can detect illegal cryptocurrency transactions with overall accuracy close to 90%.
The study was published in the Chinese peer-reviewed journal Intelligence Magazine. Sun Jingchao, the corresponding author, said the research “provides an accurate, scalable and interpretable solution” for detecting illegal crypto transactions and “offers an innovative technical path” for regulators targeting illicit crypto activity and other economic crimes.
The framework uses a memory module and a large language model to identify the anonymity and cross-border features of cryptocurrency activity, allowing it to trace illegal transactions such as money laundering.
The publication comes as China continues to step up its crackdown on financial crimes tied to cryptocurrencies. In March this year, the Supreme People’s Procuratorate said that throughout 2025, prosecutors had charged 3,259 people in money-laundering cases involving virtual currencies and underground banks.
As cryptocurrency trading volume grows rapidly, its anonymity and cross-border characteristics have created channels for illicit capital flows. The AI detection tool developed by police researchers points to a shift in regulatory methods from passive tracking to proactive, intelligent identification.
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