China

## Report on Retail_Trading_Status in China

**Date:** 2025-06-26

**Topic:** Retail_Trading_Status

**Description:** Assess whether individual citizens and residents in the country are legally permitted to buy, sell, and hold cryptocurrencies. Detail the regulatory environment surrounding this activity (e.g., KYC/AML requirements imposed on platforms, general warnings issued).

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### 1. Current Status Identification

**Status:** Banned

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### 2. Detailed Narrative Explanation

China has adopted a stringent and progressively tightening stance on cryptocurrency trading and related activities for its citizens and residents. While some nuanced interpretations and isolated court opinions have emerged, the overarching regulatory framework and official government position firmly establish that retail cryptocurrency trading, including buying and selling, is banned. Holding cryptocurrencies by individuals, while not explicitly criminalized in the same vein as trading or facilitating transactions, exists in a legally precarious and unsupported environment.

**Historical Background and Regulatory Evolution:**

China was once a dominant force in the global cryptocurrency market, particularly in Bitcoin trading and mining. However, concerns over financial stability, capital flight, money laundering, and the potential undermining of the state-controlled currency led to a series of increasingly restrictive measures.

*   **2013:** The People's Bank of China (PBoC) and other regulatory bodies issued a notice preventing financial institutions from conducting Bitcoin-related business.
*   **2017:** A comprehensive ban on Initial Coin Offerings (ICOs) was implemented, and domestic cryptocurrency exchanges were ordered to cease operations. This was a pivotal moment, significantly curtailing formal cryptocurrency trading channels within mainland China. The PBoC described ICO financing as illegal public financing.
*   **2021:** The crackdown intensified significantly. In May and June 2021, authorities reiterated bans on financial institutions and payment companies providing crypto-related services and launched a crackdown on cryptocurrency mining. In September 2021, a joint notice from the PBoC and nine other government departments declared all virtual currency-related business activities illegal financial activities. This notice explicitly stated that overseas virtual currency exchanges providing services to Chinese residents via the internet are also considered illegal financial activities. This is often cited as the most comprehensive ban, effectively prohibiting most forms of cryptocurrency engagement.

**Current Regulatory Landscape (2024-2025):**

Recent information, including reports from early and mid-2025, indicates a continuation and even potential intensification of these restrictive policies.

*   **Comprehensive Ban on Crypto Activities:** Reports from early 2025 suggest that China has moved towards a "comprehensive ownership ban," making even individual ownership illegal, effective from June 1, 2025. This includes trading, mining, and holding. The stated aims are to centralize financial control and promote the digital yuan (e-CNY).
*   **Targeting Cross-Border Transactions:** Regulations announced at the end of 2024 and effective in early 2025 require banks to identify and block transactions linked to cryptocurrencies, targeting cross-border flows. China's foreign exchange regulator, the State Administration of Foreign Exchange (SAFE), has mandated that commercial banks flag risky forex trades, including those involving digital assets.
*   **No Legal Recognition as Currency:** Authorities consistently reiterate that virtual currencies do not have the same legal status as fiat currencies and cannot be circulated in the market as such.
*   **Financial Institutions Prohibited:** Financial institutions and payment service providers are strictly prohibited from offering any services related to virtual currencies, including account opening, registration, trading, clearing, and settlement.
*   **Enforcement and Penalties:** The government emphasizes strict enforcement and punishment for engaging in illegal virtual currency activities, encouraging public reporting of such activities.
*   **AML/KYC:** While specific crypto-focused KYC/AML regulations for *permitted* trading are moot due to the ban, China has been strengthening its general Anti-Money Laundering (AML) laws. The revised AML law, effective January 1, 2025, expands obligations and considers risks from new technologies, implicitly including virtual assets despite their illicit status for trading. Laundering criminal proceeds through cryptocurrencies, despite the trading ban, has seen arrests.

**Nuance Regarding "Holding" and "Property Attributes":**

Despite the overarching ban on trading and related financial activities, some court rulings and legal analyses have introduced a degree of nuance regarding the legal status of *holding* cryptocurrencies as a form of virtual property.

*   A Shanghai Songjiang People's Court ruling in November 2024 clarified that owning cryptocurrencies is not *in itself* illegal for individuals and that digital assets have "property attributes" under Chinese law. However, this ruling explicitly reiterated that their use is strictly limited to personal ownership as commodities, not as legal tender or for investment/trading activities by businesses. The judge emphasized that commercial crypto-related activities remain strictly controlled and illegal due to risks to financial order.
*   Other legal interpretations also suggest that while trading platforms and ICOs are banned, the mere act of holding cryptocurrency by an individual has not been explicitly criminalized in the same way, and it may be considered a virtual commodity.

However, these interpretations exist within a broader context of a severe crackdown on all crypto-related financial activities. Accessing, trading, or converting these "held" assets into fiat currency through any regulated channel within China remains illegal. Individuals attempting to trade often resort to using VPNs to access foreign exchanges, which itself carries risks given the government's stance. The recent reports of a potential "comprehensive ownership ban" from June 2025 would, if accurate and enforced, eliminate this gray area around holding.

**Conclusion on Status:**

Considering the explicit government decrees banning all virtual currency-related business activities, the prohibition on financial institutions and payment providers from offering crypto services, the crackdown on mining, and the targeting of offshore exchanges serving Chinese residents, the most accurate status for retail cryptocurrency trading (buying and selling) is **Banned**. While individuals might technically "hold" previously acquired cryptocurrencies, their ability to legally trade or transact with them within China is non-existent through formal channels. The legal recognition as "property" in some court contexts does not equate to permission for trading or participation in the crypto market, which is deemed illegal. The latest reports from 2025 further solidify this "Banned" status, extending it to potentially include even personal ownership.

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### 3. Specific, Relevant Text Excerpts

*   **People's Bank of China (and other departments) - September 2021 Notice (Summary from source):** "All virtual-currency-related business activities are illegal and should be strictly prohibited and cracked down upon in accordance with the law... It is also considered an illegal financial activity for overseas virtual-currency exchanges to provide services for domestic residents via the internet."
*   **CMS Expert Guide to Crypto Regulation in China (referencing Circular 237, likely the September 2021 Notice):** "Key provisions of Circular 237 include: Emphasis of the illegality of virtual currency-related activities: The Circular emphasizes that virtual currencies do not possess legal status as official currencies in China, and declares that virtual currency related business activities are classified as illegal financial activities, including activities of exchanging legal currency with virtual currency, exchanging virtual currencies with each other, acting as a central counterparty for buying and selling virtual currencies, providing information intermediation and pricing services for virtual currency transactions, token issuance financing, and virtual currency derivative trading etc."
*   **CMS Expert Guide to Crypto Regulation in China (on offshore exchanges):** "Crackdown on offshore exchanges: Circular 237 also targets offshore virtual currency exchanges that provide services to Chinese residents. The authorities will monitor and block access to these platforms, as well as scrutinize and punish individuals or entities involved in facilitating such services."
*   **Coinpedia (reporting on 2025 developments):** "No, as of June 1, 2025, China has implemented a comprehensive ban on all crypto activities, including trading, mining, and individual ownership, making it illegal to hold or transact in crypto."
*   **Binance News / CoinEdition (reporting on 2025 developments):** "On May 30, 2025, China introduced a new nationwide ban prohibiting the personal ownership of cryptocurrencies, including Bitcoin, according to a report by Binance. The updated policy expands earlier restrictions on crypto trading and mining, now outlawing even individual holdings of digital assets." (It's important to note this is reported as "according to a report by Binance" and refers to an unverified report in another part of the text, highlighting the rapidly evolving and sometimes opaque nature of information).
*   **IDNFinancials (reporting on 2025 developments):** "In addition to previous prohibitions on trading and mining activities, China has now officially outlawed private ownership of digital currencies such as Bitcoin. This latest move was reported by global crypto exchange Binance and is seen as a significant escalation of China's stringent policies toward the digital asset industry."
*   **Bitget (reporting on 2025 developments):** "The 2025 China crypto ban represents the nation's harshest stance to date. Unlike previous clampdowns, this regulation outlaws both cryptocurrency trading and ownership for all Chinese citizens and businesses."
*   **Shanghai Songjiang People's Court Judge Sun Jie (November 2024, as reported by CryptoSlate & South China Morning Post):** "Although it is not illegal for an individual to simply hold virtual currency, commercial entities cannot participate in virtual currency investment transactions or even issue tokens on their own at will.” And, "As a virtual commodity with the attributes of property, cryptocurrency ownership is not prohibited by Chinese law... This does not extend to business activity, however, as it can disrupt economic and financial order or act as payment for illegal activity."
*   **Binance (reporting on new regulations effective early 2025):** "The latest regulations, announced on December 31, 2024, target cross-border cryptocurrency transactions. China's foreign exchange regulator demands that banks identify and block transactions linked to cryptocurrencies..."
*   **Freeman Law (referencing 2017 and 2020 positions):** "The Chinese government banned initial coin offerings (ICOs) in 2017 and ordered the closure of exchange platforms... Despite this ban, it is generally not illegal to hold cryptocurrency in China. In October of 2020, the People's Bank of China issued a draft law providing legal status to the digital yuan, the central bank's digital currency." (This predates the more comprehensive 2021 bans and the reported 2025 ownership ban).

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### 4. URL Links to Sources

1.  *(No specific content used for this report, timestamp only)*
2.  [https://cms.law/en/int/expert-guides/cms-expert-guide-to-crypto-regulation/china](https://cms.law/en/int/expert-guides/cms-expert-guide-to-crypto-regulation/china)
3.  [https://cryptoslate.com/cryptocurrency-clarified-to-be-personal-property-in-china-remains-barred-for-businesses/](https://cryptoslate.com/cryptocurrency-clarified-to-be-personal-property-in-china-remains-barred-for-businesses/)
4.  *(Primarily focuses on Hong Kong, Japan, Taiwan; limited direct relevance to mainland China's retail status beyond general context of China's ban)*
5.  [https://www.weforum.org/agenda/2022/01/what-s-behind-china-s-cryptocurrency-ban/](https://www.weforum.org/agenda/2022/01/what-s-behind-china-s-cryptocurrency-ban/)
6.  [https://coinpedia.org/crypto-regulation/crypto-regulations-in-china/](https://coinpedia.org/crypto-regulation/crypto-regulations-in-china/)
7.  [https://freemanlaw.com/china-and-cryptocurrency/](https://freemanlaw.com/china-and-cryptocurrency/)
8.  [https://www.binance.com/en/square/post/2025-01-03-china-tightens-cryptocurrency-regulations-are-other-countries-taking-notes-5339610196307](https://www.binance.com/en/square/post/2025-01-03-china-tightens-cryptocurrency-regulations-are-other-countries-taking-notes-5339610196307)
9.  [https://www.scmp.com/tech/policy/article/3287040/shanghai-court-says-crypto-ownership-legal-under-china-law-amid-bitcoin-price-surge](https://www.scmp.com/tech/policy/article/3287040/shanghai-court-says-crypto-ownership-legal-under-china-law-amid-bitcoin-price-surge)
10. [https://www.ecovis.com/focus-china/chinas-cryptocurrency-and-blockchain-regulatory-environment/](https://www.ecovis.com/focus-china/chinas-cryptocurrency-and-blockchain-regulatory-environment/)
11. [https://www.reddit.com/r/CryptoCurrency/comments/1b73xkb/china_high_court_recognises_the_legality_of/](https://www.reddit.com/r/CryptoCurrency/comments/1b73xkb/china_high_court_recognises_the_legality_of/) (Note: Reddit is a secondary aggregator, the ultimate source is the court opinion.)
12. [https://medium.com/@vikramnathofficial/the-crypto-paradox-china-banned-bitcoin-but-the-chinese-built-a-global-crypto-empire-288b505ff02a](https://medium.com/@vikramnathofficial/the-crypto-paradox-china-banned-bitcoin-but-the-chinese-built-a-global-crypto-empire-288b505ff02a)
13. [https://coingeek.com/china-targets-digital-asset-transactions-with-stricter-forex-laws/](https://coingeek.com/china-targets-digital-asset-transactions-with-stricter-forex-laws/)
14. [https://www.mitrade.com/news/daily-analysis/chinese-court-declares-personal-crypto-ownership-legal-in-mainland-china](https://www.mitrade.com/news/daily-analysis/chinese-court-declares-personal-crypto-ownership-legal-in-mainland-china)
15. [http://www.news.cn/english/2021-09/24/c_1310206682.htm](http://www.news.cn/english/2021-09/24/c_1310206682.htm) (Link via China News Net, reporting official PBoC notice)
16. [https://www.binance.com/en/square/post/2025-05-30-china-bans-holding-of-bitcoin-and-all-cryptocurrencies-report-says-9549176007079](https://www.binance.com/en/square/post/2025-05-30-china-bans-holding-of-bitcoin-and-all-cryptocurrencies-report-says-9549176007079)
17. [https://www.idnfinancials.com/news/amp/china-tightens-financial-control-crypto-now-fully-banned](https://www.idnfinancials.com/news/amp/china-tightens-financial-control-crypto-now-fully-banned)
18. [https://rr2.capital/blog/will-china-lift-the-ban-on-crypto-in-2025-exploring-the-possibilities/](https://rr2.capital/blog/will-china-lift-the-ban-on-crypto-in-2025-exploring-the-possibilities/)
19. [https://www.bitget.com/blog/articles/china-crypto-ban-2025-impact-on-bitcoin-price-south-korea-election](https://www.bitget.com/blog/articles/china-crypto-ban-2025-impact-on-bitcoin-price-south-korea-election)
20. [https://www.vinciworks.com/blog/chinas-new-aml-laws-are-an-upgrade-but-could-prove-a-risk/](https://www.vinciworks.com/blog/chinas-new-aml-laws-are-an-upgrade-but-could-prove-a-risk/)
21. [https://tax.thomsonreuters.com/blog/cryptocurrency-global-regulatory-updates/](https://tax.thomsonreuters.com/blog/cryptocurrency-global-regulatory-updates/)
22. [https://www.binance.com/en/square/post/2025-05-31-china-bans-crypto-trading-and-mining-on-may-31-2025-9588691880434](https://www.binance.com/en/square/post/2025-05-31-china-bans-crypto-trading-and-mining-on-may-31-2025-9588691880434)
23. [https://didit.com/identity-verification-kyc-and-aml-compliance-in-china/](https://didit.com/identity-verification-kyc-and-aml-compliance-in-china/)
24. *(Duplicate content covered by other links like 3, 9, 14)*
25. [https://regulatedunitedeurope.com/en/blog/crypto-in-china/](https://regulatedunitedeurope.com/en/blog/crypto-in-china/)
26. [https://cryptonews.com/news/is-crypto-banned-in-china-full-history-of-china-crypto-bans.htm](https://cryptonews.com/news/is-crypto-banned-in-china-full-history-of-china-crypto-bans.htm)
27. *(Focuses on potential market impact of interest rates, not direct retail trading status)*
28. [https://kpmg.com/cn/en/home/insights/2024/05/china-s-new-aml-law.html](https://kpmg.com/cn/en/home/insights/2024/05/china-s-new-aml-law.html) (Note: Link states Jan 1, 2025 effective date)
29. [https://defipllanet.org/assessing-the-impact-of-chinas-crypto-crackdown/](https://defipllanet.org/assessing-the-impact-of-chinas-crypto-crackdown/)
30. [https://www.amlwatcher.com/2024/02/china-modifies-the-anti-money-laundering-legislation-to-take-into-account-the-risks-associated-with-cryptocurrencies/](https://www.amlwatcher.com/2024/02/china-modifies-the-anti-money-laundering-legislation-to-take-into-account-the-risks-associated-with-cryptocurrencies/)
31. *(Focuses on market trends around Chinese New Year, not direct retail trading status)*
32. [https://www.forbes.com/advisor/investing/cryptocurrency/digital-yuan-china-cbdc/](https://www.forbes.com/advisor/investing/cryptocurrency/digital-yuan-china-cbdc/)
33. [https://www.geopoliticalmonitor.com/cbdc-with-chinese-characteristics-political-economy-of-the-e-yuan/](https://www.geopoliticalmonitor.com/cbdc-with-chinese-characteristics-political-economy-of-the-e-yuan/)
34. [https://complyadvantage.com/insights/china-cryptocurrency-regulations/](https://complyadvantage.com/insights/china-cryptocurrency-regulations/)
35. [https://fintechnews.hk/9651/blockchain/china-is-issuing-its-own-cryptocurrency-answer-to-facebooks-libra/](https://fintechnews.hk/9651/blockchain/china-is-issuing-its-own-cryptocurrency-answer-to-facebooks-libra/)