China's Cryptocurrency Ban: Legal Status and Enforcement (2025)
Nov, 15 2024
China Crypto Compliance Checker
Determine if your cryptocurrency activity complies with China's 2025 regulatory framework under Circular No.237.
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What the law says today
As of June 1 2025, China has a China cryptocurrency ban that makes every cryptoârelated activity illegal. The ban covers trading, mining, token issuance, and even holding digital assets for personal use. Violations can lead to heavy administrative fines and, in severe cases, criminal charges for fraud or illegal fundraising.
Cryptocurrency is a digital asset that uses cryptography to secure transactions and control the creation of new units. In China, the government treats crypto as a âvirtual commodity,â not legal tender, and classifies any related business as illegal financial activity under Circular No.237.
Regulatory timeline at a glance
- 2017: People's Bank of China (PBOC) bans initial coin offerings (ICOs) and shuts down domestic exchanges.
- September 2021: Circular declares all crypto transactions illegal, but enforcement is uneven.
- June 2025: Circular No.237 enacts a comprehensive ban on every crypto activity, including private ownership.
The current legal framework (Circular No.237)
Circular No.237, issued by the State Administration of Market Regulation and the PBOC, spells out exactly what is prohibited:
| Activity | Legal Status | Potential Penalty |
|---|---|---|
| Trading on exchanges | Prohibited | Administrative fine up to ÂĽ500,000; possible criminal charge |
| Mining operations | Prohibited | Equipment seizure; fines up to ÂĽ1,000,000 |
| Providing pricing or information services | Prohibited | Fines; business license revocation |
| Holding crypto in a personal wallet | Deâfacto illegal (no protection) | Asset confiscation if linked to illegal activity |
| Using stateâbacked digital yuan | Allowed | None |
Enforcement and penalties
Authorities use both legal and technical means to enforce the ban. Administrative penalties range from ÂĽ100,000 to ÂĽ1,000,000, and courts have handed down criminal sentences for largeâscale fraud schemes that used crypto as a cover. Foreign nationals in China face the same penalties as citizens, and any illicit gains are seized as illegal proceeds.
Mining is officially dead
In early 2025, the government ordered a nationwide shutdown of all mining farms. The move was justified by concerns over energy consumption and financial speculation. Since then, more than 10 major exchanges have exited the mainland, and local regulators routinely raid alleged mining sites.
Blockchain vs. cryptocurrency: the official line
China distinguishes Blockchain as a useful technology for transparency and control, while branding crypto as a risk to financial stability. Stateâbacked pilots use blockchain for supplyâchain tracking, voting, and data integrity, but they never involve decentralized tokens.
The rise of the digital yuan (eâCNY)
The digital yuan, also called Digital yuan (eâCNY), is the centerpiece of Chinaâs monetary strategy. Pilot programs in Shenzhen, Suzhou, and Chengdu let citizens use eâCNY via mobile wallets that link directly to bank accounts. By contrast, private crypto offers no central oversight, which is why the government pushes the stateâissued token as a safe, regulated alternative.
A gray area for private ownership
While the law bans most activities, it does not explicitly criminalize simply holding a small amount of crypto in an offline wallet. However, those assets receive no legal protection, and any dispute involving crypto contracts is deemed void. Financial institutions are forbidden from offering any related services, meaning you cannot open a bank account to store crypto.
Crossâborder implications
Offshore firms that want to market crypto services to Chinese customers must obtain approval from Chinese regulators-a step that is effectively impossible under the current regime. Even promotional websites and socialâmedia accounts are regularly taken down.
Future outlook
Given the political and economic motivations behind the ban-centralized control, antiâmoneyâlaundering, and support for the digital yuan-there is little indication that China will loosen restrictions in the near future. Small signals, such as the Shanghai Data Exchange issuing a dataâassetâbacked financing instrument in November 2024, do not signal a policy shift toward private tokens.
Key takeaways
- All crypto activities, including private holding, are effectively illegal under Circular No.237.
- Mining has been shut down nationwide; any new operation is subject to immediate seizure.
- The state promotes blockchain technology but draws a hard line against decentralized tokens.
- eâCNY is the only digital currency endorsed by the government and is expanding rapidly.
- Legal risk applies equally to Chinese citizens and foreign nationals within Chinaâs borders.
Is it illegal to own Bitcoin in China?
Owning Bitcoin in a personal, offline wallet is not explicitly criminalized, but the asset has no legal protection and any transaction involving it is prohibited. Authorities can confiscate crypto linked to illegal activity.
What penalties can I face for crypto trading?
Administrative fines range from ÂĽ100,000 to ÂĽ1,000,000, and largeâscale fraud can lead to criminal charges, imprisonment, and asset seizure.
Can foreign companies offer crypto services to Chinese users?
No. Any offshore entity must obtain approval from Chinese regulators, which is effectively impossible under the current ban.
How does the digital yuan differ from Bitcoin?
The digital yuan is a centralized token issued by the People's Bank of China, fully integrated with the banking system, while Bitcoin is a decentralized, permissionless network without a central issuer.
What is Circular No.237?
Circular No.237 is the 2025 regulation that categorizes all cryptocurrencyârelated activities as illegal financial services, effectively banning trading, mining, token issuance, and related financial intermediation.
