Key dealers
- Chinese local authorities sell seized crypto assets to support public finances in the midst of an economic slowdown.
- An estimated 15,000 bitcoin worth $ 1.4 billion was held by Chinese local authorities at the end of last year.
China’s authorities use private companies to sell crypto assets seized from illegal activities to increase public finances when it comes to managing financial headwinds, according to a new Report from Reuters, with reference to transactions and court documents they have examined.
The exercise comes in the middle of an increase in digital asset -related crimes and takes place within a regulatory gray area, as China’s ban on crypto trade has been fully enforced since September 2021.
As has been reported, these transactions have tuned millions of dollars in municipal budgets strained through declining growth and increasing expenditure.
However, the trend has revealed a regulating vacuum. In China, there are no uniform national rules on how to handle or discard digital assets seized from cases involving fraud, money laundering, online games and other illegal activities.
Chen Shi, a team professor at Zhongan University of Economics and Law, said that the current approach is a patchwork and “not completely in line with China’s crypto trade ban.”
Being afraid that this can create opportunities for corruption and potentially invaded criminals, legal experts, judges and law enforcement officials have requested urgent reform.
At the end of 2024, China was estimated to have almost 15,000 bitcoin, valued at about $ 1.4 billion at that time, according to River.
Despite the national trading ban, much of these assets have been converted to cash with the help of private companies such as transactions on foreign cryptout changes.
Selling crypto through offshore exchanges and peer-to-peer platforms is a common method that users have adopted to circumvent the existing ban. Traders on the mainland have hired social media, VPNs and various payment methods to maintain their operations out of reach of the supervisory authority.
Shenzhen-based Jiafenxiang has sold over $ 3 billion Yuan ($ 410 million) of crypto since 2018 on behalf of several cities in eastern China, according to the report. The dollar revenue was converted to Yuan and transferred directly to local financial agencies and skirts national trade restrictions.
Some legal professionals have urged the central bank to take responsibility for managing seized crypto assets, advocates for offshore sales or a national reserve, which reflects Trump-ARA plans for a US Bitcoin reserve.
China’s government rumored to be silent Working on a strategic bitcoin reserve In response to changes in US crypto regulation.
The ban 2021 was a culmination of China’s efforts to limit what it sees as speculative financial operations and to prevent capital flights, as huge amounts of crypto were used to move money out of China.
Since the ban, China has focused on developing its own state-supported digital currency, the digital yuan (E-CNY), which is intended to provide a controlled digital payment system without the risks of decentralized crypto.
