China’s cryptocurrency ban isn’t a gray area-it’s a hard stop. Starting May 31, 2025, holding, trading, or mining any cryptocurrency within China became illegal. Not just exchanges. Not just mining farms. Crypto itself. Even if you bought Bitcoin in 2021 and kept it in a wallet you never touched since, you’re now in violation. The government doesn’t just want you to stop using crypto-it wants you to erase it. And they’re watching.
Think of it like this: if you’re a Chinese citizen, your crypto isn’t yours anymore. It’s a legal liability. The Ministry of Public Security now has tools to track wallet addresses linked to your ID, freeze accounts, and even investigate you if you hold crypto outside China. That’s right-your offshore wallet isn’t safe just because it’s not on Chinese soil. The rules now follow you.
What’s Actually Banned (And What Isn’t)
The 2025 ban isn’t an update-it’s a total rewrite. Here’s what’s illegal:
- Buying, selling, or trading any cryptocurrency on domestic or foreign exchanges while in China
- Holding Bitcoin, Ethereum, USDT, or any other digital asset in any wallet linked to your identity
- Mining crypto using any hardware, even a single GPU in your home
- Using crypto to pay for goods or services, even privately
- Working for or investing in any crypto-related business, including DeFi protocols or NFT marketplaces
- Using VPNs or proxies to access foreign exchanges if detected
What’s not banned? The digital yuan (e-CNY). The government actively promotes it as the only legal digital currency. Banks, shops, and even street vendors now accept it. It’s tracked, controlled, and tied to your real identity. There’s no anonymity. No decentralization. Just state-approved transactions.
Why You Can’t Just Use a VPN
Many people assume a VPN is enough. It’s not. In 2025, Chinese authorities upgraded their internet monitoring system to detect not just VPN traffic, but the patterns of crypto-related activity that go with it. If you log into Binance or Kraken through a VPN, your device fingerprint, timing, and IP history are logged. If your bank account shows sudden transfers to known crypto wallet addresses-even once-the system flags you.
One user in Guangzhou tried using a premium VPN to trade on OKX. He didn’t get caught for months. Then, his bank account was frozen because he transferred 0.1 ETH to a wallet that had previously received funds from a known mining pool. He was summoned by local police. He lost his job. His passport was flagged. He didn’t get his money back.
VPNs don’t protect you from financial surveillance. They just add another layer of risk.
What Happens If You’re Caught
There are no fines. No warnings. No “first offense” leniency. The punishment is immediate and severe:
- Your bank accounts are frozen without notice
- Your passport may be restricted from international travel
- You can be summoned for interrogation by local public security bureaus
- If you’re deemed to have “engaged in illegal financial activities,” you could face criminal charges under Article 225 of China’s Criminal Law
- Employers are required to report any employee suspected of crypto activity
There’s no public record of how many people have been prosecuted, but insiders say enforcement is ramping up. Local governments are under pressure to meet “crypto crime reduction” targets. That means more audits, more checks, more random wallet scans.
There’s No Legal Way Around It
You might read articles claiming you can “legally” hold crypto using offshore trusts, family members’ names, or anonymous wallets. That’s misinformation. China’s 2025 law doesn’t care about legal structures. If you’re a Chinese citizen, the government considers any crypto you control-even indirectly-as yours. If your mother holds Bitcoin in her name but you’re the one who bought it, you’re still liable.
Even using crypto for humanitarian purposes-like sending aid to a friend overseas-is illegal. The law doesn’t make exceptions. There’s no “good reason” clause.
What People Are Actually Doing (And Why It’s Risky)
Some Chinese citizens are still holding crypto. Not because they’re brave-they’re just not caught yet. Here’s what they’re doing:
- Keeping wallets offline, with no internet connection, and no links to personal info
- Using hardware wallets stored in sealed envelopes, buried or hidden
- Transferring crypto to friends or relatives abroad before the ban took effect
- Converting crypto to physical gold or high-value goods (like luxury watches) before the ban
One person in Shanghai converted 10 BTC to 200 Rolex watches in 2024. He shipped them to a cousin in Singapore. He now lives in China with no crypto-but he has assets. He says he sleeps better. But if customs ever finds those watches linked to him, he’s in trouble.
Another strategy: buying crypto in cash from overseas traders during international travel. But this is dangerous. Border control now scans for crypto-related apps on phones. If you have a wallet app open, even in incognito mode, your device can be seized. You don’t need to be caught trading-you just need to be caught with the tools.
The Only Safe Option
There’s one path that doesn’t involve risk: compliance.
If you’re in China, and you want to stay out of trouble, here’s what you do:
- Withdraw all crypto from wallets you control
- Convert it to fiat through an exchange before the ban-this is now impossible, so if you still hold crypto, you’re past the deadline
- Destroy private keys. Physically. Burn the paper. Shred the backup. Delete the file. Don’t keep a copy anywhere.
- Stop using any crypto-related apps. Uninstall them. Clear your browser history. Disable auto-fill for wallet addresses.
- Use only the digital yuan for all digital payments. It’s legal. It’s safe. It’s tracked-but so is your bank account. At least you’re not breaking the law.
It’s not about being clever. It’s about surviving. The Chinese government doesn’t want to negotiate. It wants total control. And it has the power to enforce it.
What About Foreigners in China?
If you’re not a Chinese citizen, the rules are slightly different-but not by much. Foreigners are not explicitly targeted, but they’re not protected either. If you’re working in China on a visa, your employer reports your financial activity. If you’re caught trading crypto, your visa could be revoked. Your bank could freeze your account. You could be deported.
Some expats tried using crypto to pay rent or send money home. All of them were contacted by authorities. One American teacher in Chengdu lost his job after his bank flagged a transfer to a Coinbase wallet. He wasn’t charged, but he had to leave the country within 30 days.
Bottom line: if you’re not Chinese, you’re still not safe. The rules apply to anyone physically inside China’s borders.
The Bigger Picture
China’s crypto ban isn’t about stopping innovation. It’s about control. The digital yuan is the future they want: centralized, traceable, and state-owned. Crypto represents the opposite: freedom, anonymity, decentralization. That’s why they’re erasing it.
It’s not just about money. It’s about power. And in China, power doesn’t tolerate competition-even digital competition.
If you’re outside China, you can still trade, hold, and use crypto. But if you’re inside, there’s no workaround that’s truly safe. The only way to avoid restrictions is to not have any crypto at all.
Can I still use crypto in China if I don’t tell anyone?
No. China’s surveillance system doesn’t rely on confessions. It uses financial monitoring, device fingerprinting, and blockchain analysis to detect crypto activity. Even if you never speak about it, your transactions leave digital traces. Banks, payment processors, and internet providers are legally required to report suspicious activity. If your wallet address is linked to your identity-even indirectly-you will be found.
What if I moved my crypto out of China before the 2025 ban?
If you moved crypto out before May 31, 2025, and did not use any Chinese-linked accounts or IDs to access it afterward, you’re in a gray zone. Authorities are unlikely to pursue you unless you make a mistake-like transferring funds back into China or using a Chinese IP to access your wallet. But if you’re a Chinese citizen, they still consider that crypto yours, regardless of location. There’s no legal protection.
Can I use a foreign bank account to hold crypto?
Yes, but only if you’re not in China. If you’re physically in China and use a foreign bank account to buy, sell, or hold crypto, you’re violating the law. Chinese authorities monitor cross-border financial flows. If your bank account shows activity tied to crypto exchanges, you’ll be flagged-even if the account is in your spouse’s name or a relative’s name.
Is mining crypto at home illegal?
Yes. Mining crypto using any hardware-whether it’s a single GPU or a warehouse full of ASICs-is illegal. Authorities conduct random inspections of homes and businesses. They use thermal imaging to detect unusual heat signatures from mining rigs. Even running one miner for a week can get you visited by police. There are no exceptions.
What happens to crypto I already owned before the ban?
The law doesn’t distinguish between old and new holdings. If you owned crypto before May 31, 2025, and still hold it now, you’re in violation. Authorities are not offering amnesty. Your assets are considered illegal property. You can’t legally sell them. You can’t legally move them. The only safe option is to destroy access to them permanently.
Kathryn Flanagan
December 14, 2025 AT 18:52Look, I get that China’s got its own rules, but this feels like taking away someone’s right to own something they worked for. I’m not saying break the law, but if someone bought Bitcoin in 2021 and never touched it again, why should they lose it all? It’s not like they’re hurting anyone. It’s just money, stored digitally. The government’s got the digital yuan, fine, but why can’t people have choices too?
I’ve got friends who moved crypto out before the ban, and now they’re just sitting on it overseas. They’re not using it, not trading, not doing anything risky. Just holding. Is that really a crime? I don’t think so. This feels less like financial regulation and more like control for control’s sake.
I know it’s easy to say ‘just comply,’ but when the state says ‘this thing you own is now illegal,’ it changes the whole idea of ownership. That’s not just about crypto-it’s about trust. And right now, that trust is broken.
I’m not trying to stir up trouble. I just think people deserve to be treated like adults. Not like kids who need to be told what they can and can’t have. Even if it’s digital.
And honestly? If I lived there, I’d probably do the same thing as that guy in Shanghai-turn it into watches. At least then you can hold it in your hands. That’s real. That’s tangible. You can’t confiscate a Rolex without looking like a jerk.
Still, I feel bad for people who didn’t have the means to move their assets. That’s the real tragedy here-not the law, but the inequality in how it hits people.