Catenaa, Thursday, April 17, 2025- China local governments are selling seized cryptocurrencies through private firms in offshore markets, despite the country’s sweeping ban on crypto trading, Reuters reported Tuesday.
Citing court documents and transaction records, the report says regional authorities held around 15,000 Bitcoin — valued at $1.4 billion — at the end of 2023. The assets have become a vital funding source as China’s economy slows and public coffers shrink.
Experts say the sales raise legal and ethical concerns. Without clear national guidelines on handling seized digital assets, enforcement has been “inconsistent and opaque,” prompting fears of corruption. Chen Shi, a professor at Zhongnan University of Economics and Law, called the practice a “makeshift solution” that runs counter to Beijing’s crypto policy.
According to Bitbo data, China owns roughly 194,000 BTC, worth around $16 billion, making it the second-largest national holder of Bitcoin after the United States.
The issue is further complicated by rising crypto-related crime in China. Authorities prosecuted more than 3,000 individuals for money laundering tied to digital currencies in 2024 alone, involving cases of online fraud, illegal gambling, and other offenses.
Shenzhen-based attorney Guo Zhihao said China’s central bank should manage digital asset seizures and consider building a national crypto reserve. Ru Haiyang of Hong Kong’s HashKey exchange agreed, urging the creation of a sovereign crypto fund, potentially based in Hong Kong where crypto trading is legal.
The policy debate comes amid rising U.S.-China trade tensions and increased global scrutiny of crypto’s role in national strategies.
