Overview of Virtual Currency Regulation in Mainland China
Since September 2021, ten departments, including the People's Bank of China (PBOC), jointly issued a notice explicitly defining virtual currency-related business activities as illegal financial activities and implementing a strict ban within Mainland China. Subsequently, regulatory authorities have repeatedly reiterated and strengthened this stance, including further documents issued in November 2025 and February 2026, emphasizing the prevention of risks associated with virtual currencies, especially stablecoins.
According to existing regulations, any form of fiat currency to virtual currency exchange, virtual currency trading, and the provision of virtual currency pricing and information intermediary services are strictly prohibited within Mainland China. Furthermore, overseas virtual currency exchanges providing services to residents within China via the internet are also deemed illegal financial activities.
Legal Boundaries for Personal Holding and Trading
According to a relevant article published by the Shanghai Higher People's Court in November 2024, merely holding virtual currency (e.g., Bitcoin) is not illegal in itself. However, once any form of trading, speculation, or exchange through virtual currency is involved, it may violate relevant laws and regulations in Mainland China. This means that while individuals can hold virtual assets, their trading and circulation channels have been completely cut off within the mainland.
Overseas Platforms and Potential Risks
Following the ban issued in 2021, major cryptocurrency trading platforms, including Binance and OKX, have announced their withdrawal from the Mainland China market and have either delisted or restricted services for Mainland Chinese users, typically only allowing withdrawals. Therefore, there are currently no compliant virtual currency trading platforms or trading software available for use within Mainland China.
Nevertheless, some users may still attempt to access overseas exchanges or participate in unofficial peer-to-peer (P2P) transactions through various means. However, these activities are deemed illegal by Mainland Chinese regulatory authorities and pose significant legal and financial risks. Potential risks include, but are not limited to:
- Legal Risks: Participation in illegal financial activities may lead to legal penalties.
- Financial Risks: Accounts may be frozen, and funds may be irretrievable.
- Fraud Risks: Unregulated grey trading channels are highly susceptible to fraudulent activities.
- Asset Loss Risks: Platform exit scam, hacker attacks, or operational errors can lead to permanent loss of assets.
Mainland China continues to intensify its crackdown on crimes involving the use of virtual currencies in foreign exchange and money laundering, covering various illegal and criminal activities such as fraud, illegal business operations, pyramid schemes, and illegal fundraising.
Hong Kong SAR's Different Regulatory Path
It is worth noting that, unlike Mainland China's strict ban, the Hong Kong Special Administrative Region government has adopted a more open and regulation-friendly approach to virtual assets. Since June 1, 2023, Hong Kong has implemented a Virtual Asset Service Provider (VASP) licensing regime, allowing licensed exchanges to sell virtual assets to retail investors. This demonstrates Hong Kong's determination to explore a compliant development path in the virtual asset sector, but its policy is entirely independent of Mainland China's regulatory framework and does not apply to Mainland Chinese residents.
Conclusion
Given Mainland China's comprehensive ban on virtual currency trading activities, there are no compliant virtual currency trading platforms or trading software available within the country. Any attempt to circumvent regulation and engage in virtual currency trading through unofficial channels will face severe legal and financial risks. All readers are advised to strictly adhere to the laws and regulations of their respective jurisdictions and refrain from participating in illegal financial activities.
