Local Chinese Governments Cash In on Confiscated Crypto

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Local Chinese Governments Cash In on Confiscated Crypto

Written by Aaron S.,

Editor-In-Chief

Last Updated: April 16, 2025

Key Takeaways

Chinese local governments are selling seized crypto abroad to raise funds despite a national ban on crypto trading;
The lack of clear rules for handling confiscated crypto has led to inconsistent practices and concerns about misuse;
Experts suggest the central bank should oversee these assets or hold them as reserves instead of local governments.

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Local Chinese Governments Cash In on Confiscated Crypto

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Regional authorities in China are selling cryptocurrencies taken during legal cases to bring in extra money.

These governments are working with private companies to sell the crypto outside China, since trading is banned within the country.

According to a report published on April 16, there are no clear national rules on how to manage crypto that has been seized. This has led to confusion and differences in how local agencies handle the process. Some lawyers believe this lack of structure could make it easier for people to act dishonestly.

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Documents show that local governments held around 15,000 Bitcoin BTC $110,639.55 by the end of 2023. At the time, the value of these holdings was estimated at $1.4 billion. Selling these assets has helped raise funds for public use. Overall, China is believed to hold nearly 194,000 Bitcoin, worth about $16 billion.

Chen Shi, a professor at Zhongnan University of Economics and Law, told Reuters that selling crypto this way is only a short-term solution and does not fully align with China's current restrictions on digital currency trading.

According to Shenzhen-based lawyer Guo Zhihao, the central bank should manage the assets and either sell them in legal markets overseas or keep them as part of a reserve.

Meanwhile, the US government has recently explored ways to increase its Bitcoin holdings without using taxpayer funds. What options are being considered? Read the full story.