China’s Ministry of State Security (MSS) warned on Sept. 28 that virtual currencies are increasingly used in money laundering, cybercrime and espionage, describing crypto as an “accomplice” to intelligence activities rather than an espionage technology itself. The ministry said foreign intelligence services may use cryptocurrency to pay agents and recruit targets by claiming that transfers are difficult to detect. It also disputed the idea that crypto transactions are anonymous, arguing that public blockchain records, exchange information, device and IP data, and crypto-to-fiat conversions can help investigators connect pseudonymous addresses with individuals. The warning did not announce new restrictions or identify specific intelligence groups, wallets or espionage cases. It reinforces China’s existing crackdown, under which crypto-related financial activities are banned on the mainland, while February 2026 rules also addressed yuan-pegged stablecoins and tokenized real-world assets. The broader concern comes as regulators globally expand anti-money-laundering controls and transaction-reporting requirements, although traceability does not mean every wallet can automatically be attributed to a person.