Crypto Activity Compliance Checker
Is This Activity Legal?
Check if your crypto-related activity complies with China's ban effective June 1, 2025
Cryptocurrency exchange restrictions in China is a regulatory regime that prohibits Chinese residents from accessing, trading, or holding digital assets on any crypto exchange. Since the People's Bank of China (PBOC) issued Circular No.237 in May 2025, the ban has become absolute - no on‑ramps, no off‑ramps, no mining, and no private ownership. The crackdown reshapes how everyday Chinese citizens can (or cannot) interact with Bitcoin, Tether (USDT), or any other token.
Key Takeaways
- Effective June 1 2025, China bans all crypto‑related activities, including trading, mining, and private ownership.
- Circular No.237 classifies every crypto business as an illegal financial activity.
- Enforcement relies on bank‑level monitoring, telecom surveillance, and coordinated police raids.
- Hong Kong remains a regulated hub, starkly contrasting mainland policy.
- Attempting to bypass the ban can lead to heavy fines, criminal charges, and asset seizures.
How the Ban Evolved: A Timeline
- December 2013: The first official notice warns banks against Bitcoin transactions.
- April 2014: Authorities order closure of Bitcoin trading accounts.
- September 2017: Initial Coin Offerings (ICO) declared illegal; 24 platforms shut down.
- June 2021: Mining banned over environmental concerns, forcing miners overseas.
- September 2021: Trading and transaction bans tighten, targeting both retail and institutional players.
- May 30 2025: People's Bank of China releases Circular No.237, outlawing every crypto‑related service.
- June 1 2025: Ban takes full effect - private ownership, exchange access, and mining become illegal.
What Circular No.237 Actually Says
The regulation lists ten prohibited activities, including:
- Cryptocurrency derivative trading.
- Providing price‑information or matchmaking services for crypto transactions.
- Exchanging legal tender for crypto and vice‑versa.
- Acting as a central counterparty for crypto buys and sells.
- Token‑issuance financing.
Financial institutions must identify and block any account linked to these activities, deploying real‑time monitoring models that flag abnormal transaction patterns.
Enforcement: Tech‑Heavy Policing
In July 2025, police and regulators launched a coordinated crackdown on Tether (USDT)‑based cross‑border transfers, citing capital‑flight risks. The crackdown used AI‑driven transaction monitoring, mobile‑network interception, and mandatory reporting by telecom providers.
Key enforcement tools include:
- Bank‑level AML filters: All major banks, including Alipay and WeChat Pay, are required to block crypto‑related payment channels.
- Telecom surveillance: Internet Service Providers must flag VPN usage that targets known foreign exchanges.
- OTC broker raids: Over‑the‑counter dealers are subject to surprise inspections and heavy fines.
Impact on Everyday Citizens
For the average Chinese citizen, the ban means:
- No legal way to buy Bitcoin, Ether, or any token.
- Inability to transfer crypto assets abroad, even for legitimate remittances.
- Risk of criminal prosecution for using VPNs to access offshore exchanges.
- Loss of mining income if any personal mining rigs remain.
- Reliance on the state‑backed Digital yuan for digital payments.
Companies are also barred from holding crypto on their balance sheets. Only offshore subsidiaries or Hong Kong‑listed products can provide indirect exposure.
China vs. Hong Kong: A Contrast
| Aspect | Mainland China | Hong Kong |
|---|---|---|
| Legal Status of Trading | Completely prohibited (Circular No.237) | Legally permitted under a licensing regime |
| Mining | Banned since 2021, enforcement continues | Allowed with standard environmental compliance |
| Stablecoins | All stablecoins banned; USDT crackdown in 2025 | Regulated; licensing required for issuance |
| Digital Currency | State‑backed Digital yuan promoted | Supports both Digital yuan pilots and private tokens |
| Enforcement Tools | AI‑driven AML, telecom monitoring, police raids | Regulatory supervision by SFC, market‑based compliance |
How Some Users Try to Bypass the Ban (And Why It’s Risky)
Despite the crackdown, a small number of citizens still attempt workarounds:
- VPNs and proxy services: Used to reach offshore exchanges, but recent telecom sweeps have made detection easier.
- Peer‑to‑peer (P2P) platforms: Direct trades on encrypted messengers, yet both parties can be traced through transaction patterns.
- Offshore accounts: Chinese residents open accounts in Singapore or Malaysia to buy crypto, but capital‑control checks on inbound/outbound transfers often flag these moves.
Legal consequences include up to three years in prison, fines exceeding 10 % of illicit gains, and mandatory confiscation of crypto assets.
Future Outlook: Digital Yuan Dominance
With the ban solidified, the Chinese government is doubling down on the Digital yuan (CBDC). Pilot programs in Shanghai and Shenzhen aim to replace retail crypto use with a state‑controlled alternative. Analysts expect the enforcement apparatus to stay aggressive, especially as the government seeks to prevent capital flight and stabilize the yuan. No credible signal suggests a reversal in the near term.
Quick Checklist for Chinese Citizens
- Do not attempt to open accounts on foreign crypto exchanges.
- Avoid using VPNs for crypto‑related traffic; it’s monitored.
- Do not hold any private crypto wallets; confiscation is possible.
- Use the official Digital yuan apps for digital payments.
- If you’re a business, ensure all crypto exposure is through offshore subsidiaries compliant with local law.
Frequently Asked Questions
Is it illegal for a Chinese citizen to own Bitcoin?
Yes. Since the June 2025 ban, holding Bitcoin or any other cryptocurrency is classified as an illegal financial activity under Circular No.237.
Can I still trade crypto on a Hong Kong exchange?
Technically you could, but accessing a Hong Kong platform from mainland China requires a VPN, which is monitored. Using it risks criminal prosecution.
What happens if I’m caught using a VPN to trade crypto?
Authorities can levy fines up to 10 % of the transaction value, confiscate assets, and impose up to three years of imprisonment.
Is the Digital yuan a cryptocurrency?
No. It is a central‑bank digital currency (CBDC) issued by the People's Bank of China, fully regulated and backed by the state.
Are there any legal ways for Chinese firms to gain crypto exposure?
Only through offshore subsidiaries or via Hong Kong‑listed products that are not marketed directly to mainland residents.
Jenna Em
Every time the government drops a new rule, they’re really just tightening the invisible net around us. The crypto ban isn’t about finance – it’s about control, surveillance, and keeping us in the dark. They say it protects the economy, but I see a pattern of fear‑mongering that fits a larger agenda.
Stephen Rees
I hear your concerns, and I wonder if the answer lies deeper than the headlines. Perhaps the state’s desire to dominate the narrative is less about money and more about power over thought.
Katheline Coleman
Thank you for outlining the regulatory developments so comprehensively. The delineation between the mainland’s prohibitions and Hong Kong’s licensing regime is particularly noteworthy. It appears that, while the People’s Bank of China seeks absolute control, Hong Kong continues to foster a regulated yet innovative environment. This contrast may influence cross‑border capital flows in the foreseeable future.