Chinese Local Governments Consider Selling Seized Crypto Amid Trading Ban

Native governments in China are exploring methods to liquidate seized crypto, navigating a authorized grey space created by the nation’s strict ban on crypto buying and selling and exchanges.

In response to an April 16 report by Reuters, the absence of clear rules on dealing with confiscated digital property has led to inconsistent practices and raised considerations over transparency and corruption.

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Chinese language Authorities Use Non-public Companies to Promote Seized Crypto Offshore

Citing court docket and transaction information, Reuters revealed that some native authorities have turned to personal corporations to promote seized crypto holdings in offshore markets. They then convert them into money to bolster public funds.

These efforts have reportedly generated important earnings. By the tip of 2023, native governments collectively held round 15,000 Bitcoin (BTC), value roughly $1.4 billion.

China is presently estimated to carry about 194,000 BTC valued at $16 billion. This makes it the world’s second-largest nationwide Bitcoin holder, trailing solely the US, based on Bitbo knowledge.

Chen Shi, a professor at Zhongnan College of Economics and Legislation, advised Reuters that the present strategy is a “makeshift resolution” and never totally in compliance with China’s blanket crypto ban.

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When one of many world’s largest economies begins shopping for $BTC…

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The difficulty is additional difficult by an increase in crypto-related crimes throughout the nation, together with fraud, unlawful playing, and cash laundering. In 2024 alone, greater than 3,000 people have been prosecuted for crypto-related cash laundering actions.

Authorized specialists and trade insiders have proposed different methods for managing the property. Shenzhen-based lawyer Guo Zhihao advised that the Folks’s Financial institution of China take over accountability for seized crypto and contemplate promoting it overseas or changing it right into a nationwide reserve.

Ru Haiyang, co-CEO of Hong Kong-based change HashKey, supported the thought, noting that China may observe the US instance of utilizing forfeited Bitcoin as a strategic asset.

Some have additionally floated the thought of establishing a sovereign crypto fund in Hong Kong, the place crypto buying and selling is legally permitted. The talk comes as US–China tensions rise and Donald Trump strikes to tighten oversight of stablecoins whereas encouraging crypto innovation.

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Chinese language Residents Use Offshore Exchanges to Commerce Crypto

Regardless of a nationwide ban on crypto buying and selling and mining lately, many Chinese language residents proceed to entry digital currencies by offshore exchanges, peer-to-peer platforms, and VPNs. These workarounds have made enforcement extra advanced.

As tensions develop over how seized cryptocurrencies needs to be dealt with, discussions amongst policymakers intensify. Authorized specialists recommend that the shortage of clear nationwide pointers has led to inconsistent practices and elevated the danger of mismanagement or corruption.

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Ruholamin Haqshanas

Crypto Journalist

Ruholamin Haqshanas is an achieved crypto and finance journalist with over three years of expertise. He has been featured in varied high-profile shops, together with Cryptonews.com, Investing.com, 24/7 Wall St, and Business2Community.
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