By 2025, an estimated 58 million Chinese citizens hold cryptocurrency-more than the entire population of Canada. Yet, if your Bitcoin wallet gets hacked or you’re scammed on an offshore exchange, Chinese courts won’t help you. Not because you’re out of luck, but because the law doesn’t recognize your crypto as yours to begin with.
Ownership Without Rights
In China, you can hold cryptocurrency. But you can’t own it legally.The government doesn’t arrest people for simply storing Bitcoin or Ethereum in a private wallet. That’s the gray zone. But if you try to sue someone who stole your coins, or if a trading platform goes bust and you want your money back, the court will tell you: There’s no contract here. No legal basis. No protection.
Since 2021, all crypto-related financial activities-trading, mining, exchanges-have been banned. In 2025, that ban got tighter. The central bank issued Circular No. 237, making it clear: any business dealing with virtual assets is illegal financial activity. That includes OTC brokers, peer-to-peer platforms, and even crypto ATMs operating in secret.
But here’s the twist: on July 11, 2025, a court in Shanghai ruled that Bitcoin could be considered “legally protected property” in a civil dispute over asset division. It was a single case. No new law passed. No official policy update. Just one judge deciding that, in this specific situation, the digital asset had value worth recognizing. The media called it a policy shift. The government didn’t comment. The next week, another court in Guangdong dismissed a similar case outright, saying crypto ownership violates public order.
That’s the reality. You can hold crypto. But the law won’t defend it. You’re on your own.
What You Can’t Do-And What Happens If You Try
Here’s what’s strictly illegal in China as of 2025:
- Running a crypto exchange-even if it’s just for friends
- Mining Bitcoin or any other coin using electricity or hardware
- Accepting crypto as payment for goods or services
- Using a VPN to access Binance, Kraken, or OKX from inside China
- Transferring yuan to offshore exchanges to buy crypto
Violate any of these, and you risk more than just losing your coins. You could face fines, asset freezes, or even criminal charges under China’s Anti-Money Laundering Law or the Criminal Code for illegal fundraising. In 2024, a Shenzhen businessman was sentenced to three years in prison for helping clients convert yuan into Bitcoin through OTC channels. He didn’t profit-he just facilitated trades. Still, the court called it “illegal financial activity.”
Even if you think you’re just “investing,” the system treats you like a criminal. Banks monitor transactions for keywords like “BTC,” “ETH,” or “USDT.” If they spot activity linked to crypto, they freeze accounts and report to regulators. No warning. No appeal. Just silence.
The Digital Yuan: The Real Alternative
China isn’t against digital money. It’s against decentralized money.
The People’s Bank of China has been testing its Central Bank Digital Currency, the e-CNY, in over 200 cities since 2020. By 2025, more than 300 million people have used it for everyday payments-groceries, public transport, even street vendor snacks. The government controls every transaction. Every dollar spent is traceable. Every wallet is tied to your real identity.
That’s the point. The e-CNY isn’t designed to give you freedom. It’s designed to give the state control. No anonymity. No offshore access. No volatility. No risk to financial stability. And no chance for Bitcoin to compete.
While crypto is labeled a threat, blockchain technology is being pushed hard-just not for coins. The state is funding blockchain projects for supply chain tracking, land registries, and carbon credits. But these are permissioned systems. Only approved entities can join. Only authorized nodes can validate. It’s blockchain with a government override button.
So if you’re thinking about switching from Bitcoin to e-CNY, understand this: you’re not moving to a better system. You’re moving from no protection to controlled surveillance.
How People Still Hold Crypto-And Why It’s Dangerous
Despite the ban, crypto isn’t disappearing in China. It’s going underground.
People use peer-to-peer apps like WeChat groups or Telegram channels to trade USDT for cash. Some pay in physical yuan at coffee shops or parking lots. Others use offshore exchanges with fake IDs or borrowed passports. A growing number rely on decentralized wallets like MetaMask, storing keys on hardware devices hidden in drawers or safes.
But here’s what no one tells you: if you’re caught using a VPN to access a foreign exchange, you’re not just breaking a rule-you’re violating China’s Cybersecurity Law. Penalties can include fines up to 100,000 RMB ($14,000 USD) and a permanent mark on your personal credit record.
And if your wallet gets stolen? Good luck recovering it. Chinese police won’t investigate crypto theft. They’ll tell you: “We don’t handle virtual assets.” No case number. No detective. No hope.
There are stories-real ones-of people who lost life savings to fake mining schemes. Others who sent money to “trusted” OTC traders who vanished. No lawsuits. No justice. Just silence.
What the Future Holds
Will China ever legalize crypto? Don’t count on it.
The government’s goal isn’t to regulate crypto. It’s to replace it. The e-CNY is the endgame. It’s cheaper to run, easier to control, and impossible to evade. Why would they allow a rival system that undermines their monetary authority?
Some analysts point to the July 2025 Shanghai ruling as a sign of softening. But that’s wishful thinking. One court decision doesn’t change national policy. And the central bank’s 2025 white paper made it clear: “Decentralized digital assets pose systemic risks to financial security.”
The only path forward for Chinese crypto holders is to accept the risk. If you hold crypto, you’re not an investor. You’re a speculator in a legal vacuum. You’re gambling with your assets, knowing the house has all the rules-and won’t pay out if you win.
There’s no safety net. No insurance. No recourse. Just your private key and the quiet understanding that, in China, your digital wealth exists only as long as the state lets it.
What You Should Do Now
If you’re a crypto holder in China, here’s what matters:
- Don’t trade. Don’t mine. Don’t promote. Keep it private.
- Never use a Chinese bank account to buy or sell crypto.
- Store keys offline. Hardware wallets are safer than software ones.
- Never store private keys on devices connected to Chinese networks.
- Assume any crypto you hold is at risk of total loss-with no legal remedy.
There’s no legal strategy. No loophole. No workaround that won’t expose you to serious consequences.
China’s stance isn’t going to change. The digital yuan is here to stay. And if you want to hold crypto, you’re choosing to live outside the law. That’s not a risk you can hedge. It’s a gamble you make alone.
Is it illegal to hold Bitcoin in China in 2025?
No, simply holding Bitcoin or other cryptocurrencies in a private wallet is not explicitly criminalized. However, the Chinese government does not recognize it as legal property, and any transactions tied to it-like trading, mining, or using exchanges-are illegal. You can own it in practice, but not under the law.
Can Chinese courts protect crypto assets if they’re stolen?
No. Chinese courts consistently refuse to hear cases involving crypto theft, fraud, or contract disputes because they consider cryptocurrency transactions illegal. Even if you have proof of ownership, the law treats the asset as void, so there’s no legal basis for recovery.
What happens if I use a VPN to access Binance or Coinbase?
Using a VPN to access foreign crypto exchanges violates China’s Cybersecurity Law. While enforcement varies, you risk account freezes, fines up to 100,000 RMB, and a permanent mark on your personal credit record. Authorities actively monitor for such activity, especially since 2025’s tightened restrictions.
Is mining Bitcoin still possible in China?
No. All cryptocurrency mining was officially banned nationwide in 2021, and enforcement intensified in 2025. Power companies are required to cut electricity to suspected mining operations, and local governments actively shut down facilities. Any remaining mining is underground and carries high legal risk.
Why is China pushing the digital yuan instead of allowing crypto?
The digital yuan (e-CNY) gives the government full control over transactions, spending patterns, and monetary policy. Unlike decentralized crypto, it’s traceable, programmable, and tied to real identities. China wants digital money that strengthens state power-not undermines it.
Can foreigners in China legally hold crypto?
No. The same rules apply to everyone in China, regardless of nationality. Foreigners are subject to the same ban on crypto trading, mining, and exchanges. Holding crypto isn’t criminalized per se, but any activity around it-including using a Chinese bank or local OTC service-is illegal.
8 Comments
Sierra Myers
So let me get this straight - you can hold Bitcoin like it’s a collectible baseball card, but if someone steals it, you can’t even file a police report? That’s not a legal system, that’s a glitch in a video game where the NPC says ‘nope’ and walks away.
SHIVA SHANKAR PAMUNDALAR
China doesn’t ban crypto because it’s dangerous - it bans it because it’s free. The moment money stops being a leash, the state panics. The e-CNY isn’t the future - it’s the cage with a shiny LED display.
Michael Fitzgibbon
I’ve lived in both the U.S. and China, and what struck me most isn’t the ban - it’s the quiet resignation of people who still hold crypto. They don’t talk about it. They don’t brag. They just store keys like heirlooms, hoping the next generation won’t inherit a digital ghost.
There’s a dignity in that silence. Not defiance. Not rebellion. Just the stubborn belief that something valuable shouldn’t vanish because the rules changed.
Komal Choudhary
Wait so if I use a VPN and buy BTC and then get hacked, I can’t even cry to the cops? That’s so unfair. I mean, I’m not even asking for justice - just a little sympathy? Like, can’t they at least say ‘sorry’?!
priyanka subbaraj
Legal ownership requires state recognition. Crypto = no recognition. Ergo = no ownership. End of story.
Ben Costlee
There’s something haunting about how ordinary people in China are quietly becoming digital nomads of their own wealth - not because they’re tech bros, but because they’re just trying to preserve something that matters to them.
The e-CNY isn’t just a currency. It’s a monument to control. And the fact that people still risk everything to hold Bitcoin? That’s not irrational. That’s human.
Mark Adelmann
My cousin in Guangzhou keeps his keys on a USB stick taped to the bottom of his shoe. He says it’s the only place the government won’t think to look. I don’t know whether to laugh or cry.
Meanwhile, I’m over here buying Dogecoin on Coinbase like it’s a meme. We’re living in two different worlds.
ola frank
The structural contradiction here lies in the ontological status of crypto-assets under civil law: if property rights are contingent upon state-sanctioned recognition, then non-sovereign digital assets are inherently extralegal entities. The Shanghai ruling was not a precedent - it was an anomaly within a legal framework that deliberately denies epistemic legitimacy to decentralized value systems. The e-CNY, by contrast, is a computable sovereign instrument - programmable, traceable, and entirely subsumed under central authority. This is not regulatory ambiguity; it is epistemic hegemony.