Is Crypto Regulated in China? The Full Ban Explained (2025)

As of June 1, 2025, owning, trading, or mining cryptocurrency is illegal in China. This isn’t a gray area or a warning-it’s a full criminal ban backed by prison sentences, asset seizures, and nationwide surveillance. If you’re holding Bitcoin, Ethereum, or even USDT in mainland China, you’re breaking the law. And it’s not just exchanges or miners being targeted-individuals are being arrested for simply holding crypto.

How China Got to a Complete Crypto Ban

China didn’t wake up one day and decide to ban crypto. It spent over a decade slowly shutting it down, step by step. The first move came in 2013, when banks were told not to process Bitcoin transactions. Then in 2014, trading accounts were shut down. By 2017, initial coin offerings (ICOs) were banned, and domestic crypto exchanges like Huobi and OKEx were forced to close their doors. Mining got hit hard in 2021, when power to crypto farms was cut off across provinces like Sichuan and Inner Mongolia. By 2022, courts stopped recognizing crypto as property in civil cases-meaning if you lost your Bitcoin in a scam, you had no legal recourse.

The final blow came on May 30, 2025. The People’s Bank of China issued a decree that made every form of cryptocurrency activity illegal. Not just trading or mining-owning it. This wasn’t a tweak. It was the endgame. The law now treats crypto like contraband. Even holding digital coins in a wallet is considered a violation.

What’s Actually Illegal Now?

Under the 2025 rules, these actions are all criminal offenses:

• Buying, selling, or exchanging any cryptocurrency (Bitcoin, Ethereum, Solana, stablecoins, etc.)
• Mining crypto using any hardware, even a single GPU in your home
• Holding crypto in any wallet-hot, cold, or paper
• Using crypto to pay for goods or services
• Providing services to crypto platforms, even if you’re based overseas
• Advertising or promoting crypto-related products to Chinese residents

There’s no exception for small amounts. A person caught with $50 worth of Bitcoin faces the same legal risk as someone with $500,000. The law doesn’t care about scale-it cares about presence.

How the Government Enforces the Ban

China doesn’t rely on luck to catch crypto users. It uses a coordinated, high-tech surveillance system. The Ministry of Public Security, the Cyberspace Administration, and the People’s Bank of China work together to track digital currency activity. Banks and payment apps like Alipay and WeChat Pay are required to scan every transaction for signs of crypto links. If your account sends money to a known crypto exchange address-even once-it triggers an automatic investigation.

Internet companies must block crypto-related websites and social media content. If you post about Bitcoin on Weibo or Telegram, your account gets flagged. VPNs used to access foreign exchanges are actively monitored and blocked. Even overseas exchanges that don’t have a physical presence in China are banned from serving Chinese users-and platforms like Binance and Coinbase now geo-block Chinese IP addresses to avoid legal trouble.

The real power lies in asset seizure. Authorities can freeze bank accounts, seize smartphones, and confiscate mining rigs. In 2024, a man in Guangdong lost his entire home after investigators found he’d used his property’s equity to buy crypto. He was sentenced to 2 years in prison.

Real Cases: People Are Going to Jail

This isn’t theoretical. Courts are handing down prison sentences. In August 2024, a man named Liu in Beijing was sentenced to 3.5 years for selling USDT. He claimed he didn’t know the money he received was stolen-but the court ruled that if you should have known, it’s enough. He was fined 40,000 yuan ($5,570) and sent to prison. That case set a precedent: ignorance isn’t a defense.

Another case in Shanghai involved a woman who kept $20,000 in Ethereum in a hardware wallet. She thought it was safe because she never traded it. But police found the wallet during a routine search of her home. She was charged with “illegal possession of financial assets” and given a 1-year suspended sentence. Her wallet was confiscated. Her case was published in the Supreme Court’s official bulletin as a warning to others.

What About Blockchain? Isn’t That Allowed?

Yes-but only if the government controls it. China has no problem with blockchain technology. In fact, it’s investing billions into it. The state-run digital currency, e-CNY (Digital Yuan), is being rolled out nationwide. It’s not decentralized. It’s not anonymous. Every transaction is tracked by the central bank. The government wants digital money-but only on its terms.

Companies can build blockchain applications for supply chains, land registries, or voting systems-as long as they’re approved by the state. But any project that uses public, permissionless ledgers (like Bitcoin or Ethereum) is banned. The distinction is clear: centralized control = good. Decentralized freedom = illegal.

What’s Happening in 2025? Any Signs of Change?

In July 2025, officials in Shanghai held private meetings to discuss stablecoins and digital asset regulation. Some experts suggested the government might consider limited exceptions for institutional-grade stablecoins tied to the yuan. But nothing has changed. No law has been amended. No policy has been released. The ban remains total.

These discussions don’t mean the ban is lifting. They mean the government is thinking ahead-possibly preparing for future digital currency integration or international pressure. But for now, the rules are unchanged: no crypto, no exceptions.

What If You’re a Foreigner Living in China?

The law applies to everyone in China, regardless of nationality. If you’re a tourist, student, or expat, you’re not exempt. Bringing a hardware wallet into the country is risky. If customs finds it, they can seize it. Using a crypto app while on a Chinese network could trigger an investigation. Even accessing a foreign exchange website from your hotel room could be flagged.

The safest approach? Don’t touch crypto at all while in China. Don’t even open the app. Don’t check your balance. Don’t talk about it. The risk isn’t just legal-it’s personal. Your phone, your bank, your internet activity-all are monitored.

What’s the Real Reason Behind the Ban?

China’s goal isn’t just to stop gambling or money laundering. It’s about control. The government fears losing control over money. If people can move wealth outside the system using crypto, it weakens capital controls. It undermines the yuan. It threatens the state’s ability to track spending, tax income, and manage the economy.

By banning crypto, China eliminates a financial alternative to its own system. It forces everyone to use e-CNY or traditional banking-both of which are fully monitored. It’s not about technology. It’s about power.

What Should You Do If You Own Crypto and Live in China?

If you’re in China and own crypto, you have three options:

1. Leave it-and risk seizure, fines, or arrest if discovered.
2. Transfer it out-before June 1, 2025, you could have moved it. Now, sending it out is illegal and traceable.
3. Destroy it-delete your wallet, erase private keys, and treat it as lost. This is the only way to fully comply.

There is no legal way to cash out crypto in China now. No exchange will take your money. No bank will process the transaction. Even trying to sell to a friend carries risk for both parties.

What About Hong Kong and Macau?

Hong Kong and Macau are separate legal jurisdictions. Crypto is still legal there, with regulated exchanges and licensing systems. But if you’re a mainland resident, crossing the border to trade crypto still carries risk. Authorities can track your movements, and if you’re found to be engaging in crypto activity from mainland China-even remotely-you can still be punished.

The ban applies to Chinese citizens and residents, no matter where they are physically located. If you’re a Chinese national and you trade crypto from Hong Kong, you’re still breaking the law.

Bottom Line: Crypto Is Dead in Mainland China

As of 2025, there is no legal crypto market in mainland China. No mining. No trading. No holding. No exceptions. The government has built a surveillance and enforcement system designed to make crypto impossible to use. The penalties are real. The arrests are happening. The courts are setting precedents.

If you’re thinking about entering the Chinese crypto space-don’t. If you’re holding crypto in China-get it out, or get ready for consequences. The era of crypto in China is over. The state won.