Crypto Legal Risk Assessment Tool for China
Assess Your Crypto Activity Risk
This tool evaluates your risk level based on China's June 1, 2025 ban on all cryptocurrency activities for mainland citizens. Results are based on official regulations and enforcement patterns described in the article.
As of June 1, 2025, Chinese citizens can no longer legally buy, sell, hold, or trade any cryptocurrency - not even Bitcoin or Ethereum. It’s not a gray area. It’s not a suggestion. It’s a full criminal prohibition enforced by the People’s Bank of China (PBOC), backed by police raids, bank freezes, and digital surveillance. If you’re a resident of mainland China, owning crypto isn’t just risky - it’s illegal.
What Exactly Is Banned?
The ban isn’t just about exchanges. It covers every single part of the crypto ecosystem. Trading on Binance, Coinbase, or OKX? Illegal. Mining Bitcoin using your home GPU? Illegal. Holding crypto in a wallet? Illegal. Even using USDT to send money overseas? Illegal. The PBOC’s Circular No.237, issued on May 30, 2025, made it clear: any activity tied to decentralized digital assets is now classified as an illegal financial activity.This includes everything from peer-to-peer trading through OTC brokers to providing price data for crypto markets. Even posting about crypto on social media for educational purposes can get you flagged if regulators decide it’s promoting illegal activity. The law doesn’t care if you’re a student, a trader, or just curious - if you touch crypto, you’re breaking the law.
How Did China Get Here?
China didn’t wake up one day and ban crypto. It spent over a decade slowly tightening the screws. Back in 2013, the PBOC warned banks not to process Bitcoin transactions. By 2017, they shut down all domestic crypto exchanges - BTCC, Huobi, and OKCoin were forced to close or move offshore. In 2021, they banned crypto mining, forcing thousands of miners to relocate to Kazakhstan, Russia, or the U.S. Each step was deliberate. Each step removed another escape route.The final move came in June 2025. No more loopholes. No more exceptions. Even holding crypto in a private wallet - whether you bought it before the ban or got it as a gift - became a violation. The government didn’t just want to stop trading. They wanted to erase the idea that digital money could exist outside their control.
How Are They Enforcing It?
China doesn’t rely on laws alone. They use technology, banks, and police to make sure the ban sticks.Major banks like ICBC, China Construction Bank, and Alipay are required to monitor every transaction for signs of crypto activity. If someone sends money to a known crypto exchange wallet, even once, their account gets flagged. If they repeatedly send small amounts to multiple wallets, that’s treated as money laundering. Accounts get frozen. Cards get canceled. People get summoned by local police.
In July 2025, authorities ran a nationwide operation targeting USDT-based transfers. They tracked wallets linked to OTC brokers who helped people convert yuan into crypto. Over 300 people were arrested. Hundreds of bank accounts were shut down. The message was clear: if you’re trying to bypass the ban, you’re not just breaking rules - you’re breaking the law.
Even using a VPN to access Binance or Kraken won’t save you. Authorities can detect unusual traffic patterns. If your device connects to known crypto exchange servers, your IP gets logged. Your phone number gets flagged. Your internet service provider gets ordered to report you.
What About Companies?
Chinese companies can’t legally hold crypto on their balance sheets. No Bitcoin reserves. No Ethereum investments. No tokenized assets. Any company found with crypto exposure - even indirectly through an offshore subsidiary - faces heavy fines and possible criminal charges for executives.Some firms try to work around this by listing crypto-linked products on the Hong Kong stock exchange. But even that’s risky. If a Chinese investor buys shares in a company that holds Bitcoin, regulators can still investigate whether the investment violates capital control rules. The line between legal and illegal is thin - and constantly shifting.
Why Is China Doing This?
It’s not just about controlling money. It’s about control itself.China’s goal is to replace decentralized digital currencies with its own - the digital yuan, or e-CNY. The central bank wants complete visibility into every transaction. Every payment. Every transfer. Every dollar spent. With crypto, that’s impossible. With the digital yuan, it’s built in.
The government also fears capital flight. When people buy Bitcoin or stablecoins, they can move money out of China faster than any bank transfer. That threatens the yuan’s value. The ban helps keep money inside the system, where the state can manage it.
And then there’s the energy argument. China used to run 70% of the world’s Bitcoin mining. But the electricity use was massive. When they cracked down on mining in 2021, they cited environmental concerns. Now, they say crypto is a threat to financial stability, national security, and energy resources. It’s a multi-layered justification - but the real driver is control.
What About Hong Kong?
Hong Kong is the exception. While mainland China bans everything, Hong Kong is building a regulated crypto hub. Exchanges like HashKey and OSL are licensed. Institutional investors can trade. ETFs for Bitcoin and Ethereum are approved. The government sees crypto as a way to attract global capital and position Hong Kong as a fintech leader.But here’s the catch: Chinese citizens living in mainland China can’t legally access Hong Kong exchanges. If you’re in Beijing and you try to sign up for a Hong Kong exchange, you’re still breaking Chinese law. The border isn’t just physical - it’s digital.
What Happens If You Get Caught?
There’s no official punishment listed in the law - because the government doesn’t need to spell it out. Enforcement is arbitrary, but severe.First-time offenders might get a warning and a fine. Repeat offenders? Their bank accounts are frozen for months. Their passports may be restricted. In extreme cases, people have been charged with illegal business operations or financial fraud - charges that carry prison sentences.
There’s no public record of how many people have been prosecuted, but local reports suggest hundreds of cases in the first six months after the ban. Most are settled quietly - no media coverage, no trials. The goal isn’t justice. It’s deterrence.
Is There Any Way Around It?
Technically, yes. Some people still use P2P platforms, offshore wallets, or crypto ATMs in border cities. Others trade through friends or family abroad. But these methods are dangerous, slow, and expensive.OTC brokers who used to help people buy crypto now operate in the shadows. Prices are inflated. Scams are common. If you’re caught, you’re not just losing money - you’re risking your freedom.
And even if you succeed in holding crypto, you can’t spend it. No stores in China accept Bitcoin. No apps let you pay with Ethereum. The digital yuan is the only digital currency the government allows - and it’s designed to be tracked, controlled, and limited.
What’s Next?
There’s no sign the ban will loosen. In fact, the opposite is true. The digital yuan is expanding. More cities are rolling out pilot programs. More businesses are required to accept it. The government is investing billions in blockchain tech - but only for state-controlled systems.Experts agree: China won’t reverse course. Crypto doesn’t fit into their vision of a digitally controlled economy. The digital yuan is their answer - not Bitcoin, not Ethereum, not any decentralized alternative.
For Chinese citizens, the message is simple: crypto is gone. The state owns the money now.
What Does This Mean for the Rest of the World?
China’s ban sent shockwaves through global crypto markets. Before 2025, Chinese traders made up 30% of Bitcoin volume. Now, that’s gone. Exchanges that relied on Chinese users lost billions in revenue. Some, like Huobi and OKX, moved their headquarters to Dubai or Singapore.But the bigger impact is psychological. China proved a country can shut down crypto entirely - not just ban exchanges, but erase ownership. Other governments are watching. If China can do it, why not others?
For now, the world still has open markets. But China’s model shows how easily digital freedom can be replaced by digital control.
I'm a blockchain analyst and crypto educator who builds research-backed content for traders and newcomers. I publish deep dives on emerging coins, dissect exchange mechanics, and curate legitimate airdrop opportunities. Previously I led token economics at a fintech startup and now consult for Web3 projects. I turn complex on-chain data into clear, actionable insights.