Cryptocurrency Legal Issues for Foreigners in China

China has taken a strict stance on cryptocurrency. As a foreigner living or doing business in China, understanding these regulations is crucial to avoid legal trouble.

China's Crypto Regulations

Current Status (2026)

• Cryptocurrency trading banned
• Crypto exchanges prohibited
• Mining operations banned
• ICOs and token offerings illegal
• Providing crypto services prohibited

What's NOT Banned

• Holding cryptocurrency (personal possession)
• Peer-to-peer transactions (gray area)
• Blockchain technology development

Risks for Foreigners

Legal Risks

• Criminal charges for large-scale trading
• Money laundering allegations
• Illegal business operations charges
• Asset seizure

Practical Risks

• Bank account freezing
• Payment platform restrictions
• Difficulty converting to fiat
• Scams targeting foreigners

Common Scenarios

Receiving Crypto Payments

• Technically possible but risky
• Converting to RMB problematic
• May trigger bank scrutiny

Using VPNs for Trading

• Accessing foreign exchanges via VPN
• Still subject to Chinese law while in China
• Bank transfers may be flagged

Crypto-Related Business

• Operating exchanges: illegal
• Providing trading services: illegal
• Marketing crypto products: prohibited

Digital Yuan (e-CNY)

China's official digital currency:

• Legal and government-backed
• Not a cryptocurrency
• Centrally controlled
• Foreigners can use in pilot cities

If You're Investigated

• Seek legal counsel immediately
• Don't delete evidence (obstruction)
• Understand your rights
• Contact your embassy if detained

Protecting Yourself

• Avoid crypto transactions while in China
• Don't use Chinese bank accounts for crypto
• Keep crypto activities in home country
• Be cautious of "opportunities"
• Understand the legal landscape

Leaving China with Crypto

• No declaration requirements for crypto
• But large fiat conversions may be questioned
• Keep records of legitimate sources