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There has been a surge in criminal activities involving crypto in China, resulting in a growing stash of seized digital assets by the government. This has prompted local authorities to explore ways to dispose of the hoard, leading courts and the financial sector to push for clearer regulations. Reuters noted that lawyers believe the complete lack of crypto laws—due to the ban on digital asset trading in mainland China—has resulted in opaque and inconsistent handling of seized assets. This lack of transparency has fueled corruption and made lawbreakers more comfortable, the lawyers added. It has created a unique scenario in the current ecosystem, where market volatility remains high. A major sell-off by the Chinese government could drag Bitcoin’s price down, potentially triggering another bearish phase. On the other hand, this development may also signal the early stages of crypto regulation in a country where cryptocurrency trading remains officially banned. Sell the Crypto to Fill Public Coffers – Chinese Local Governments Needless to say, the ballooning amount of seized crypto has created an environment of unease within the Chinese government. Some local administrations believe that the government should leverage private companies to sell the tokens to replenish public coffers, which have slowed down the economy, Reuters reports. However, this is nothing more than a “makeshift solution,” according to Chen Shi, a professor at the Zhongnan University of Economics and Law. “It does not fully align with China’s current ban on crypto trading,” he added. The professor further added that better regulation is the need of the hour as the seized crypto continues to balloon. These sentiments are echoed by Guo Zhihao, a senior partner at Beijing Yingke Law Firm, who believes that if China’s central bank can handle cryptocurrencies, it could either sell them overseas or build a crypto reserve in…

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Filed under: News - @ April 16, 2025 7:27 am