Chinese Government Crypto Seizures and Enforcement Actions: The Complete Ban Explained

On June 1, 2025, China made it illegal to own, trade, or mine any cryptocurrency-period. Not just exchanges. Not just mining farms. Not even holding Bitcoin in a personal wallet. If you’re in China and you have crypto, you’re breaking the law. The government doesn’t just want you to stop-it wants your coins gone. And they’ve got the power to take them.

How China Got to a Total Crypto Ban

China didn’t wake up one day and decide to ban crypto. It spent 16 years slowly tightening the screws. The first move came in 2009, when authorities blocked virtual currencies from being used to buy real goods. That was small. But it set the tone: private money was a threat to state control.

By 2013, banks were told not to touch Bitcoin. In 2014, trading accounts got shut down. In 2017, Initial Coin Offerings (ICOs) were outlawed, and every crypto exchange operating inside China was forced to close. The message was clear: no domestic crypto market. But miners kept going. China used to run over 70% of the world’s Bitcoin mining. That changed in June 2021, when the government ordered all mining operations shut down. Power grids were overloaded, they said. Environmental damage was too high. The real reason? Control.

By September 2021, even using crypto for payments was banned. But people still found ways-through VPNs, offshore exchanges, peer-to-peer deals. The government watched. Waited. Then, on May 30, 2025, the People’s Bank of China dropped the final hammer: a total ban on all cryptocurrency activity, effective June 1, 2025. Now, even holding crypto in a wallet is illegal. Accessing Binance or Coinbase via a VPN? Illegal. Selling crypto to a friend? Illegal. Owning it at all? Illegal.

How the Seizures Work

The law doesn’t just say “don’t do it.” It says, “we’ll take it.” Authorities have built a system to find, freeze, and confiscate crypto holdings. They track financial flows through banks and payment apps like Alipay and WeChat Pay. If money moves in unusual patterns-say, a sudden deposit into a wallet linked to a known exchange-they flag it. They monitor internet traffic for connections to crypto platforms. They’ve trained local police to raid homes and offices where crypto activity is suspected.

When they find crypto, they don’t ask nicely. They seize the hardware-laptops, mining rigs, hardware wallets. They demand private keys. If you refuse, you face fines up to 10 times the value of the crypto, or jail time. In one case in Guangdong, a man was sentenced to three years for holding 12 Bitcoin he bought in 2020. He didn’t trade it. He didn’t mine it. He just kept it. The court ruled: possession equals violation.

The most famous seizure happened overseas. In October 2025, UK police raided a home in London and found 61,000 Bitcoin tied to a Chinese national running a Ponzi scheme. The value? Nearly $7 billion. The UK wanted to use the funds to help victims. China demanded they be returned to Chinese authorities. The standoff continues. It shows how China’s crypto crackdown doesn’t stop at its borders-it follows its citizens globally.

Why the Ban? It’s Not Just About Risk

You might think China banned crypto because it’s risky. Or because of fraud. Or because of energy use. Those are the public reasons. The real ones are deeper.

First, China wants total control over money. Cryptocurrencies like Bitcoin and Ethereum operate outside the state’s financial system. They can’t be tracked, frozen, or taxed by the government. That’s unacceptable in a country where every yuan is monitored.

Second, China is pushing its own digital currency-the digital yuan. It’s not decentralized. It’s not anonymous. Every transaction is recorded by the People’s Bank of China. The government can see who you paid, how much, and when. The crypto ban removes competition. Why use Bitcoin when the state gives you a better, safer, more controllable option?

Third, capital controls. China has strict rules on moving money out of the country. Crypto made it easy to bypass those rules. People bought Bitcoin in China, sent it abroad, sold it, and got foreign cash. That’s a direct threat to China’s ability to manage its currency and economy. The ban shuts that door.

What Happens to People Who Try to Bypass the Ban?

Some still try. They use VPNs to access foreign exchanges. They trade through Telegram groups. They use peer-to-peer apps like LocalBitcoins. But the penalties are harsh.

If you’re caught using a VPN to access a crypto site, your internet service provider can be fined. If you’re caught trading, your bank account can be frozen. If you’re caught holding crypto, you lose it-and possibly your freedom. In 2024, a Shanghai resident was arrested after police found $1.2 million in Ethereum on a hidden hard drive. He claimed he bought it before the ban. The court didn’t care. “The law is now,” they said.

Even foreign crypto platforms that let Chinese users sign up are being pressured. In 2025, Binance, Kraken, and others received formal notices from Chinese regulators: stop serving Chinese users, or face legal consequences in your own country. Many complied. Now, if you’re in China and you try to log in, you get blocked before you even reach the site.

The Global Ripple Effect

China’s ban didn’t just affect its citizens. It changed the world.

Before 2021, China mined more Bitcoin than the rest of the world combined. When mining was banned, miners packed up their rigs and moved to Kazakhstan, the U.S., and Canada. Bitcoin’s hash rate dropped overnight. Prices swung wildly. The global crypto market lost its biggest player.

Now, with the 2025 ban, China is no longer a market-it’s a zero zone. No trading. No mining. No holding. That’s unprecedented. No other major economy has gone this far. The U.S. regulates. The EU licenses. Japan taxes. China erases.

The result? Crypto businesses that once relied on Chinese users are now rebuilding elsewhere. Exchanges moved headquarters. Developers left Beijing for Singapore or Dubai. Venture capital shifted focus. China’s exit created space for others-but it also made crypto more volatile. When the world’s largest economy pulls out, the market feels it.

Is There Any Way Out?

No. Not legally.

There’s no grandfather clause. No grace period. Even crypto you owned before 2025 is now illegal. There’s no official way to surrender it and get compensated. The government doesn’t want it. They want it gone.

Some people try to hide their crypto in offshore wallets, or send it to relatives abroad. But if they’re caught, the penalties are worse. The state is watching. The digital yuan system tracks every transaction. If you try to move money from crypto to yuan, the system flags it.

The only legal way to hold digital money in China now is the digital yuan. It’s not crypto. It’s not decentralized. It’s not private. But it’s the only option left.

What’s Next?

Don’t expect China to ease up. The 2025 ban is the endgame, not a step. Experts say the government will keep strengthening enforcement-more surveillance, more penalties, more AI-powered monitoring of financial data.

The digital yuan will expand. Soon, it could be required for all public services, taxes, and even school fees. No crypto. No cash. Just the state’s version of digital money.

For now, if you’re in China and you hold crypto, you’re taking a huge risk. The government isn’t bluffing. They’ve already taken billions. They’re not stopping.