Despite the ban, China selling seized crypto to top up coffers as economy slows

[yhiaali3]

Reuters reports local governments in China are using private companies to sell seized crypto, going against the country's trading ban.

Local governments in China are reportedly seeking ways to offload seized crypto while facing challenges due to the country’s ban on crypto trading and exchanges.

The absence of clear rules on how authorities should manage seized cryptocurrency has led to “inconsistent and opaque approaches,” which some lawyers fear could open the door to corruption, according to an April 16 report by Reuters.

Chinese local governments are using private companies to sell seized cryptocurrencies in offshore markets in exchange for cash to replenish public coffers, Reuters reported, citing transaction and court documents.

The local governments reportedly held approximately 15,000 Bitcoin worth $1.4 billion at the end of 2023, and the sales have been a significant source of income.

China holds an estimated 194,000 BTC worth approximately $16 billion and is the second largest nation Bitcoin holder behind the US, according to Bitbo.

Link to the full article:
https://cointelegraph.com/news/china-selling-seized-crypto-top-up-coffers-reuters

Here's a link to the Reuters report:
https://www.reuters.com/world/china/china-debates-how-handle-criminal-crypto-cache-2025-04-15/

This is really interesting. China, which bans cryptocurrency trading, is selling confiscated cryptocurrencies to support the state treasury. Is this legal?

A few days ago, I wrote about international payment settlements between China and Russia using Bitcoin due to the tariff war. Today, we hear that China is selling Bitcoin to support the state treasury. Has the tariff war opened new horizons for Bitcoin?

[TomPluz]

Can this move made by local governments in China legal? Well, I am sure it is not illegal but am sure this is hypocrisy since China already banned Bitcoin years ago and declared that the nation will not have anything to do with the said digital asset. But right now, China remains a factor in the movement of Bitcoin all because of the huge BTC they confiscated years ago. Definitely, if China will decide to sell all Bitcoin it got the market will tumble but am sure the government at the top is now also thinking strategically since they know now they can use Bitcoin as a way to avoid sanctions in international trade just like what Russia got into. So let's see where is the direction the government is taking on this aspect...will they keep or will they let go?

[yhiaali3]

Definitely, if China will decide to sell all Bitcoin it got the market will tumble but am sure the government at the top is now also thinking strategically since they know now they can use Bitcoin as a way to avoid sanctions in international trade just like what Russia got into. So let's see where is the direction the government is taking on this aspect...will they keep or will they let go?

I don't expect China to sell all of its Bitcoin, and even if it did, I don't think it would impact the market, as they are doing so secretly and outside the market. Since the sale is taking place outside the market, it won't directly impact the price of Bitcoin.

I've also heard some voices in China calling for the government to use the confiscated Bitcoin as a strategic reserve for the Chinese treasury, similar to what Trump has done in the United States. If that happens, it would be hugely positive news for the market.

[bitterguy28]

This is really interesting. China, which bans cryptocurrency trading, is selling confiscated cryptocurrencies to support the state treasury. Is this legal?

as the article said, due to unclear regulations there are a lot of inconsistencies happening and the government can might as well take advantage of that and it seems like that is exactly what they are doing i do not know if it is illegal but it is definitely has hypocrisy if they are gonna use crypto for their own good might as well let their citizens do the same thing

A few days ago, I wrote about international payment settlements between China and Russia using Bitcoin due to the tariff war. Today, we hear that China is selling Bitcoin to support the state treasury. Has the tariff war opened new horizons for Bitcoin?

countries definitely have realized what cryptocurrencies can provide in cases where international trades using fiat will be more of a hassle and very expensive so i do think that we will see a lot of countries turn to bitcoin now

[Baofeng]

It's not about legality, their government is authoritative so what do you expect?

And it make sense for them to sell as they have ban it, meaning they should get rid of their Bitcoin and so they will have to sell at some point. So no surprises here, specially with the tariff war and then exposing those luxury items, China is doing all and everything in their power to get back at the West.

[Mr. Magkaisa]

        -      I think in my own assessment of what China did, it is not illegal because from what I know or understand, the cryptocurrencies they sold came from the crypto they illegally obtained that entered their country. Then the worth of bitcoins they sold was also around 15000btc which is equivalent to 1.4 billion$.

I think they did that because of the status of their economy there because of the tariff imposed on them by the US, which I think especially the merchants or business people in China were angry about, so the Chinese government did that.

[Jating]

I think they did that because of the status of their economy there because of the tariff imposed on them by the US, which I think especially the merchants or business people in China were angry about, so the Chinese government did that.

This could be one reason as well as to why they've sold their seized Bitcoin, if might have been the wrong timing as it could have been sold when we are in $100k or higher. But for them it doesn't matter, and because of the tariffs imposed on them by US their economy might be hit big time. So to counter that, they will have to sell some if not most of their Bitcoin to cover what they might have lost due to the tariff war by Trump. It might be hard decision for them, and i think they have all the authority and it's not illegal to sell them.

[Stompix]

This is really interesting. China, which bans cryptocurrency trading, is selling confiscated cryptocurrencies to support the state treasury. Is this legal?

Of course it is.
They are not trading, they are liquidating digital assets, perfectly legal in any country.
The USMS auctions firearms and cars that are illegal in California, for exampleand seized but perfectly legal if the buyer is from Texas.

China has recognized cryptos as property, so why not being allowed to be sold, you can for example be allowed to sell your dog or cat, but I doubt any country would allow trading on your pet's value.

[Lucius]

There is nothing controversial about China selling the BTC it has seized, regardless of their attitude towards it - because they, as a government, are hypocrites who do whatever they want, while censoring the internet for their people and forbidding them from trading cryptocurrencies because they are afraid of influence coming from the West.

That figure of 194 000 BTC seems exaggerated and made up to me, but even if China had all those BTC (which I sincerely doubt), $16 billion for an economy with an annual GDP of over $18 trillion is a drop in the ocean.

[Basedjack]

It's not about legality, their government is authoritative so what do you expect?

And it make sense for them to sell as they have ban it, meaning they should get rid of their Bitcoin and so they will have to sell at some point. So no surprises here, specially with the tariff war and then exposing those luxury items, China is doing all and everything in their power to get back at the West.

Yes, you have a point. The tariff war has hit the influential people, especially the Chinese, they have been banned from cryptocurrency trading. Due to this terrible fire, they sell all the Bitcoins and other coins in their accounts. Because Trump is a politician, the world is panicking because of his tariff war influence. The Chinese are found to have some faults because they are friends with Russia and they do business. Trump does not like these things at all, so he has hit the Chinese.

[target]

Its their coins already. If its the local government selling the coins, its their right after all they already owned those coins. Didn't the seized coins fro, Silkroad was also auctioned?  Its not so different from what US did.

Chances is that if they liquidated those assets, are they finding the market volatile in the coming months? Because I'm sure before they decide to sell, they must have consulted someone who knows about the market.

[Cryptsafe]

I am not surprised because I had known that such a day would come, and also looking at the fact that China possesses such a large amount, they would one day look for ways to dispose of immediately, and it is currently happening of late, online dailies has it that both Russia and China sealed an energy deal with bitcoin as their means of payment and I believe Chinese government would never reject any tangible offer to use bitcoin as a means of payment to reduce their holding.

[Sim_card]

Definitely, if China will decide to sell all Bitcoin it got the market will tumble but am sure the government at the top is now also thinking strategically since they know now they can use Bitcoin as a way to avoid sanctions in international trade just like what Russia got into. So let's see where is the direction the government is taking on this aspect...will they keep or will they let go?

I don't expect China to sell all of its Bitcoin, and even if it did, I don't think it would impact the market, as they are doing so secretly and outside the market. Since the sale is taking place outside the market, it won't directly impact the price of Bitcoin.

I've also heard some voices in China calling for the government to use the confiscated Bitcoin as a strategic reserve for the Chinese treasury, similar to what Trump has done in the United States. If that happens, it would be hugely positive news for the market.

If the local government sell all those bitcoin, it will definitely affect the market and a bear market might come faster. I could remember when a firm in Germany sold all their bitcoin, it affected the market. However, no matter the quantity of bitcoin that you sell, it will only affect the market temporarily.

[0t3p0t]

A few days ago, I wrote about international payment settlements between China and Russia using Bitcoin due to the tariff war. Today, we hear that China is selling Bitcoin to support the state treasury. Has the tariff war opened new horizons for Bitcoin?

Yeah we cannot really anticipate things that will happen or their government will do because of it's secrecy which I think is based on the act of war book which sometimes misleading because it might be telling the truth or the opposite and that is how their government works they don't want to look weak that is why they project their strength even though something is not right to their country.

Seems they are hard hit by the tariff since they come up on that decision to back their government with the confiscated crypto. Sounds unusual since they look strong publicly. I am wondering how it's going if the tariff war will continue for years to come. Maybe they will sell all those crypto assets to back their large economy so it won't cripple down.

[hugeblack]

What makes it illegal? Many countries sell these coins at public auctions, and the same countries can make these coins legal.
The Chinese economy is growing by trillions of dollars, and I don't think they need to sell 1,000 bitcoins, or even 1 million.