Legal Status of Cryptocurrencies in China: Complete Ban and Enforcement in 2025

As of June 1, 2025, cryptocurrencies are completely illegal in China. Not just trading or mining - owning them carries no legal protection, and any transaction involving them is considered a violation of financial law. This isn’t a gray area. It’s a hard stop. If you’re in China, holding Bitcoin, Ethereum, or any other crypto coin, you’re doing so at your own risk - with no recourse if it’s seized, hacked, or lost. The government doesn’t just discourage it. It actively erases it.

How China Went From Crypto Hub to Crypto Zero

Just a decade ago, China was the epicenter of the global cryptocurrency scene. Over 70% of Bitcoin mining happened in Chinese data centers. Exchanges like Huobi and OKX handled billions in daily trades. Chinese investors were among the most active in the world. But that changed fast.

In 2017, the People’s Bank of China banned initial coin offerings (ICOs), calling them illegal fundraising. Then in 2021, all crypto transactions were declared void under Chinese law. But it wasn’t until June 2025, with the release of Circular No.237, that the final nail was driven in. The new rules didn’t just restrict exchanges or mining - they outlawed every single link in the chain: buying, selling, exchanging, even providing pricing data for crypto.

The shift wasn’t about technology. It was about control. China saw decentralized money as a threat to its financial sovereignty. If people could move value outside state supervision, it undermined the government’s ability to monitor capital flows, enforce taxes, or prevent money laundering. The solution? Erase it entirely.

What Exactly Is Illegal Now?

The 2025 ban is comprehensive. Here’s what you can’t do in China without breaking the law:

• Buy or sell any cryptocurrency - even peer-to-peer
• Mine Bitcoin or any other coin - all mining farms have been shut down
• Hold crypto in any wallet, whether hot or cold
• Offer crypto trading services, even as a freelance intermediary
• Accept crypto as payment for goods or services
• Market or promote crypto platforms to Chinese residents
• Use offshore exchanges to trade while physically in China

Even if you bought Bitcoin in 2020 and still hold it today, you’re not protected. Chinese courts have ruled repeatedly that crypto-related contracts are void. If you were scammed in a crypto scheme, you can’t sue for recovery. The law won’t help you - because the transaction itself was illegal from the start.

Penalties Are Real - And Harsh

The government doesn’t just issue warnings. It enforces. Fines are common, but criminal charges are not rare. If you’re caught running a crypto exchange from your apartment, or mining with a cluster of GPUs, you could face charges for illegal fundraising, financial fraud, or operating an unlicensed financial service.

Authorities don’t just target businesses. They go after individuals. In 2024, a Shanghai resident was fined 120,000 RMB ($16,500) for holding over $50,000 in crypto and transferring it to an offshore exchange. The money was confiscated. The case was publicized as a warning.

Foreigners aren’t exempt. Whether you’re a tourist, expat, or business traveler, Chinese law applies to you while you’re in the country. If you’re caught using a crypto app on your phone while in Beijing, you can be detained, fined, or deported - especially if authorities suspect you’re facilitating transactions for others.

Blockchain Is Fine. Crypto Is Not.

Here’s the twist: China still loves blockchain. But only if it’s state-controlled.

The government actively funds blockchain research, patents, and pilot programs. State banks use blockchain for supply chain tracking. Local governments use it for land registry and tax records. But every blockchain project in China is centralized. No decentralization. No anonymity. No tokens.

The message is clear: technology is good when the state controls it. Private digital money is dangerous because it can’t be monitored. That’s why China is pushing its own digital currency - the e-CNY, or digital yuan - with over 500 million users in pilot cities like Shenzhen and Hangzhou.

The e-CNY isn’t just a digital version of cash. It’s a surveillance tool. Every transaction is logged. The government can freeze payments, set expiration dates, and track spending patterns. It’s the opposite of Bitcoin. And it’s the future China wants.

Hong Kong Is the Exception - But Only for Now

Hong Kong operates under a different legal system. While mainland China bans crypto, Hong Kong passed the Stablecoin Bill in May 2025, creating a licensing regime for stablecoin issuers. Major exchanges like Binance and Kraken have opened offices there.

But don’t mistake this as a loophole. Hong Kong’s rules don’t apply to mainland China. If you’re a Hong Kong resident and you send crypto to someone in Guangzhou, you’re still breaking Chinese law. The border isn’t just geographic - it’s legal.

Even Hong Kong’s approach is cautious. Only USD-pegged stablecoins are allowed. No altcoins. No DeFi. No NFTs. The goal isn’t to enable crypto freedom - it’s to keep Hong Kong relevant as a financial hub while staying aligned with Beijing’s broader strategy.

What About Offshore Companies?

If you run a crypto exchange based in Singapore or the Cayman Islands, you might think you’re safe. You’re not.

Chinese law now explicitly bans any offshore entity from marketing crypto services to Chinese citizens - even if the transaction happens outside China. If your website is in Chinese, accepts Chinese payment methods, or targets Chinese users, you’re violating the law. Authorities have shut down dozens of offshore platforms this year for “illegally soliciting clients in China.”

There’s no licensing path. No gray zone. No legal way for an offshore company to legally serve the Chinese market with crypto services. Any attempt to do so risks being blocked, fined, or blacklisted by Chinese regulators.

What’s Next? No Reversal in Sight

Some people hoped China would soften its stance after the 2021 crackdown. Others thought the digital yuan would be a stepping stone to broader crypto acceptance. Neither happened.

The 2025 ban was the endpoint of a seven-year strategy: eliminate private crypto, centralize digital finance, and replace it with state-controlled money. The government has no incentive to reverse course. Crypto is seen as a threat to financial stability, monetary policy, and social control.

The digital yuan is now embedded in daily life - used for public transport, utility bills, and even school lunches. The infrastructure is built. The habits are forming. Why would China go back to a system it spent years destroying?

The future of crypto in China isn’t about regulation. It’s about absence. The door is locked. The key was thrown away.

What Should You Do If You’re in China?

If you’re living in or visiting China:

• Don’t hold crypto. Even if you bought it before 2025, it’s not protected.
• Don’t use crypto apps. They’re blocked on Chinese networks.
• Don’t mine. Even small setups are detected through power usage patterns.
• Don’t try to trade through VPNs. Authorities monitor traffic patterns and can trace activity.
• Use the digital yuan if you need digital payments. It’s legal, safe, and widely accepted.

If you’re outside China and thinking about investing in crypto because you believe China will reopen - don’t. The policy is too deeply tied to the government’s control strategy. Reversal is not just unlikely. It’s structurally impossible under the current political framework.

Why This Matters Beyond China

China’s move isn’t just about its own citizens. It’s a global signal. The world’s second-largest economy has chosen state control over decentralization. It’s showing other nations that you can ban crypto - and actually enforce it.

Countries watching China’s success with the digital yuan are taking notes. The U.S., EU, and India are all exploring CBDCs - but none have gone as far as China in eliminating private alternatives. China proves you don’t need to negotiate with crypto. You can just remove it.

This isn’t a temporary crackdown. It’s a new model. And it’s working - for the state.