China
Retail_Trading_Status
- Analysis ID
- #632
- Version
- Latest
- Created
- 2025-12-12 04:04
- Run
- 33948925...
- History
- View all versions
- Workflow Stage
- Step 1
Executive Summary
Retail cryptocurrency trading is effectively banned in China, with the People's Bank of China (PBOC) classifying all virtual currency-related business activities as 'illegal financial activities.' While a November 2024 Shanghai court ruling clarified that individual holding of cryptocurrency constitutes legal property ownership, the trading, mining, and provision of exchange services remain strictly prohibited. Financial institutions are barred from processing crypto transactions, and overseas exchanges are banned from serving Chinese residents.
Key Pillars
People's Bank of China (PBOC) - Primary financial regulator enforcing the ban on crypto transactions and payments.
National Development and Reform Commission (NDRC) - Enforces the nationwide ban on cryptocurrency mining.
Supreme People's Court (SPC) - Adjudicates on the civil status of crypto assets, recently affirming them as 'virtual commodities' with property rights despite the trading ban.
Cyberspace Administration of China (CAC) - Monitors and blocks access to overseas crypto exchanges and related information services.
Landmark Laws
Notice on Further Preventing and Disposing of the Risk of Hype in Virtual Currency Trading (PBOC Notice No. 237 [2021]) - Enacted: 2021-09-15
- The definitive ban declaring all virtual currency-related business activities 'illegal financial activities.' It prohibits offshore exchanges from serving locals, bans mining, and declares crypto derivatives contracts 'invalid civil acts.'
- Source
Announcement on Preventing Token Issuance Financing Risks (The ICO Ban) (Seven Ministries Announcement [2017]) - Enacted: 2017-09-04
- Prohibited Initial Coin Offerings (ICOs) and ordered the closure of domestic cryptocurrency exchanges, marking the start of China's crackdown.
- Source
Judicial Interpretation on Property Attributes of Virtual Currency (Shanghai Songjiang People's Court Ruling) - Enacted: 2024-11-18
- A significant judicial opinion clarifying that while business trading is illegal, individual ownership of cryptocurrency is not explicitly prohibited and holds 'property attributes' under civil law.
Considerations
Legal vs. Illegal: Holding crypto is legal (civil property), but trading it is an 'invalid civil act' with no legal protection for losses.
Mining Ban: Cryptocurrency mining is strictly prohibited and included in the 'Negative List' for market access.
Stablecoin Crackdown: As of late 2025, authorities have intensified scrutiny on stablecoins (like USDT) used for cross-border capital flight.
Hong Kong Distinction: The regulated crypto regime in Hong Kong is legally distinct and does not apply to Mainland China residents.
Notes
While the status is 'Banned' regarding trading infrastructure and business activities, the nuance of 'holding is legal' creates a unique environment where possession is tolerated but liquidity is criminalized. The 2025 enforcement actions suggest the government is closing loopholes rather than relaxing the ban.
Remaining Uncertainties
- Will the 'property' status of crypto lead to a formalized mechanism for inheritance or divorce settlements involving crypto assets?
- How will the 2025 crackdown on stablecoins impact the widespread use of USDT in underground OTC markets?
- Will Hong Kong's regulated regime eventually offer a 'Connect' scheme for Mainland investors, or will the firewall remain absolute?
Detailed Explanation
Detailed Explanation
China maintains a comprehensive ban on retail cryptocurrency trading and related business activities. The People's Bank of China (PBOC) has classified all virtual currency-related business activities as 'illegal financial activities,' establishing a clear prohibition. This ban, formalized in the 2021 Notice on Further Preventing and Disposing of the Risk of Hype in Virtual Currency Trading (PBOC Notice No. 237), prohibits financial institutions from processing crypto transactions, bans overseas exchanges from serving Chinese residents, and outlaws cryptocurrency mining, which is enforced by the National Development and Reform Commission (NDRC). The regulatory stance originated with the 2017 Announcement on Preventing Token Issuance Financing Risks, which prohibited Initial Coin Offerings (ICOs) and led to the closure of domestic exchanges. The legal environment presents a critical nuance: while trading is banned, individual holding of cryptocurrency was affirmed as legal property ownership in a November 2024 Shanghai court ruling, which clarified that cryptocurrencies hold 'property attributes' under civil law. This creates a unique situation where possession is tolerated but converting that possession into liquidity through trading is criminalized and considered an 'invalid civil act' offering no legal protection for losses. Enforcement is multi-agency, with the Cyberspace Administration of China (CAC) blocking access to overseas exchanges, and recent developments as of late 2025 show intensified scrutiny on stablecoins like USDT used for capital flight, indicating authorities are focused on closing loopholes rather than relaxing the ban. It is crucial to note that the regulated crypto regime in Hong Kong is legally distinct and does not apply to residents of Mainland China.
Summary Points
I. Regulatory Status
- Banned for trading, mining, and business activities.
- Legal for individual holding (possession), as affirmed by judicial opinion.
- The regulated environment in Hong Kong is legally distinct and does not apply to Mainland China residents.
II. Key Regulatory Bodies
- People's Bank of China (PBOC): The primary financial regulator enforcing the ban on crypto transactions and payments.
- National Development and Reform Commission (NDRC): Enforces the nationwide ban on cryptocurrency mining.
- Supreme People's Court (SPC): Adjudicates on the civil status of crypto assets, affirming them as 'virtual commodities' with property rights.
- Cyberspace Administration of China (CAC): Monitors and blocks access to overseas crypto exchanges and related information services.
III. Important Legislation
- Notice on Further Preventing and Disposing of the Risk of Hype in Virtual Currency Trading (PBOC Notice No. 237 [2021]), enacted 2021-09-15:
- The definitive ban declaring all virtual currency-related business activities 'illegal financial activities.'
- Prohibits offshore exchanges from serving Chinese residents.
- Bans cryptocurrency mining.
- Declares crypto derivatives contracts 'invalid civil acts.'
- Announcement on Preventing Token Issuance Financing Risks (The ICO Ban) [2017], enacted 2017-09-04:
- Prohibited Initial Coin Offerings (ICOs).
- Ordered the closure of domestic cryptocurrency exchanges.
- Judicial Interpretation on Property Attributes of Virtual Currency (Shanghai Songjiang People's Court Ruling), enacted 2024-11-18:
- Clarified that while business trading is illegal, individual ownership of cryptocurrency is not explicitly prohibited and holds 'property attributes' under civil law.
IV. Compliance Requirements
- Financial institutions are barred from processing cryptocurrency transactions.
- Overseas exchanges are banned from serving Chinese residents.
- Individuals must not engage in trading, mining, or providing exchange services.
V. Notable Restrictions or Limitations
- Trading Ban: All trading and business activities related to virtual currency are illegal financial activities.
- Mining Ban: Cryptocurrency mining is strictly prohibited and included in the national 'Negative List' for market access.
- Legal Distinction: Holding crypto is a legal civil property right, but trading it is an 'invalid civil act' with no legal protection for losses.
- Stablecoin Scrutiny: As of late 2025, authorities have intensified crackdowns on stablecoins (like USDT) used for cross-border capital flight.
VI. Recent Developments or Notes
- The November 2024 court ruling created a significant legal nuance, affirming property rights for holders while the trading ban remains in full force.
- Enforcement actions in 2025 suggest the government is focused on closing loopholes (particularly around stablecoins) rather than relaxing the existing ban.
- The environment is characterized by tolerated possession but criminalized liquidity.
Full Analysis Report
Full Analysis Report
The regulatory status of retail cryptocurrency trading in China is characterized by a comprehensive ban on all commercial and intermediary activities, classified as 'illegal financial activities' by the People's Bank of China (PBOC). The landmark 'Notice on Further Preventing and Disposing of the Risk of Hype in Virtual Currency Trading' (Notice 237), issued in September 2021, serves as the cornerstone of this framework. It explicitly criminalizes the operation of crypto exchanges, including services provided by offshore platforms to Chinese residents. Consequently, no legal avenues exist for retail investors to buy or sell crypto assets through centralized intermediaries.
Despite the strict prohibition on trading services, the legal status of individual ownership remains nuanced. In November 2024, the Shanghai Songjiang People's Court issued a ruling clarifying that cryptocurrency possesses 'property attributes' and that mere holding is not illegal under Chinese law. This distinction means that while the government does not confiscate assets from passive holders, any attempt to trade these assets is considered an 'invalid civil act.' Investors engaging in such transactions engage in them at their own risk, with no legal recourse for fraud or disputes.
Enforcement remains vigorous and adaptive. In November 2025, the PBOC convened a multi-agency meeting to reassert the ban, specifically targeting the resurgence of underground trading and the use of stablecoins for money laundering and capital flight. This crackdown involves close coordination between the central bank, public security bureaus, and internet regulators to block access to foreign websites and monitor peer-to-peer (P2P) transfers that utilize the banking system.
The environment for cryptocurrency mining is equally restrictive. The National Development and Reform Commission (NDRC) placed mining on the 'Negative List' for market access in 2021, leading to a mass exodus of mining operations. While some underground mining persists, it is subject to immediate shutdown and penalties upon detection. Overall, China maintains a 'Banned' status for retail trading infrastructure, forcing any remaining activity into high-risk, unregulated gray markets.
The regulatory status of retail cryptocurrency trading in China is characterized by a comprehensive ban on all commercial and intermediary activities, classified as 'illegal financial activities' by the People's Bank of China (PBOC). The landmark 'Notice on Further Preventing and Disposing of the Risk of Hype in Virtual Currency Trading' (Notice 237), issued in September 2021, serves as the cornerstone of this framework. It explicitly criminalizes the operation of crypto exchanges, including services provided by offshore platforms to Chinese residents. Consequently, no legal avenues exist for retail investors to buy or sell crypto assets through centralized intermediaries. Despite the strict prohibition on trading services, the legal status of *individual ownership* remains nuanced. In November 2024, the Shanghai Songjiang People's Court issued a ruling clarifying that cryptocurrency possesses 'property attributes' and that mere holding is not illegal under Chinese law. This distinction means that while the government does not confiscate assets from passive holders, any attempt to trade these assets is considered an 'invalid civil act.' Investors engaging in such transactions engage in them at their own risk, with no legal recourse for fraud or disputes. Enforcement remains vigorous and adaptive. In November 2025, the PBOC convened a multi-agency meeting to reassert the ban, specifically targeting the resurgence of underground trading and the use of stablecoins for money laundering and capital flight. This crackdown involves close coordination between the central bank, public security bureaus, and internet regulators to block access to foreign websites and monitor peer-to-peer (P2P) transfers that utilize the banking system. The environment for cryptocurrency mining is equally restrictive. The National Development and Reform Commission (NDRC) placed mining on the 'Negative List' for market access in 2021, leading to a mass exodus of mining operations. While some underground mining persists, it is subject to immediate shutdown and penalties upon detection. Overall, China maintains a 'Banned' status for retail trading infrastructure, forcing any remaining activity into high-risk, unregulated gray markets.
Source Evidence
Primary and secondary sources cited in this analysis
"Virtual currency-related business activities are illegal financial activities... Overseas virtual currency exchanges providing services to residents in China via the internet are also illegal financial activities."
"All virtual-currency-related business activities are illegal and should be strictly prohibited and cracked down upon in accordance with the law."
"It is not illegal for individuals to hold cryptocurrency... [but] commercial entities cannot participate in virtual currency investment transactions."
"The People's Bank of China convened a high-level meeting on November 28, 2025... to coordinate enforcement and crack down on illegal digital currency activities."
"As of 2025, the government of Mainland China, under PRC law, continues to prohibit cryptocurrency trading and mining."
Web Sources (11)
Sources discovered via web search grounding
Search queries used (5)
- China crypto mining ban status 2025
- Is owning cryptocurrency illegal in China 2025
- China court rulings on cryptocurrency property rights 2024
- PBOC Notice on Further Preventing and Disposing of the Risk of Hype in Virtual Currency Trading key provisions
- China cryptocurrency regulation retail trading status 2024 2025
https://coinlaw.io/crypto-regulations-in-china-statistics/
https://www.disruptionbanking.com/2025/12/09/10-of-global-crypto-users-are-in-china-where-crypto-is-illegal/
https://info.arkm.com/research/crypto-in-china-a-2025-guide-to-the-crypto-landscape
https://cryptoslate.com/crypto-clarified-as-personal-property-in-china-remains-barred-for-businesses/
https://www.thestreet.com/crypto/policy/china-bans-another-emerging-tech-after-blanket-crypto-ban
https://www.globalcompliancenews.com/2021/10/11/china-briefing-on-the-pboc-notice-on-further-preventing-and-handling-the-risk-of-speculation-in-virutal-currency-transactions-29092021/
https://cryptonews.com/news/china-doubles-down-on-crypto-ban-after-detecting-new-trading-activity/
https://www.bitget.com/academy/china-crypto-ban-bitcoin-price-south-korea-election-2025
https://www.bitget.com/news/detail/12560604367923
https://www.binance.com/en/square/post/16621708771513
https://news.bitcoin.com/pboc-instructs-chinas-banks-forbid-all-cryptocurrency-related-activities-immediately/