China's Secret Bitcoin Treasury: $59 Billion in Seized Cryptocurrency Revealed

According to a Reuters report, the absence of a uniform rule has raised concerns about potential corruption and inconsistent enforcement. This has prompted local governments to try to find ways to withdraw cash from digital assets, sparking calls from courts and the financial industry for better regulation. More than 3,000 cases of crimes hiding cryptocurrencies Besides not being recognized as legal property or currency and trading Bitcoin and other cryptocurrencies is illegal in China, local authorities and courts also have a large amount of criminal cryptocurrencies and they regularly confiscate from detected criminal activities, from internet fraud to illegal gambling. Reuters reported that judges, police and lawyers are now seeking regulatory reform to bring transparency and structure to this gray area. Transaction records reviewed by Reuters show that in some cases, government entities hired private companies to liquidate criminal crypto vaults they owned and convert digital assets into cash to supplement government funds. Court filings also point to a rapid increase in crypto-related criminal prosecutions, with authorities filing more than 3,000 lawsuits against individuals involved in crypto-related money laundering. The government should clarify the properties of the property According to blockchain security firm SAFEIS, the total amount involved in these incidents is $59 billion. In addition to enforcement measures, local governments have collected at least $51.8 billion in fines and confiscations related to criminal crypto vaults, a 65% increase over 2028. Bitcoin investment firm River estimates that Chinese local governments hold at least 15,000 Bitcoins by December 2023, of which the federal government holds around 194,000 BTC, worth around $16 billion. Chinese blockchain service provider Bit Jungle found that the government has the right to use private companies to handle any criminal cryptocurrency vaults it holds as long as it sells them through offline exchanges. According to lawyer Sun Ju, senior partner at Shanghai Landing Law Offices, which focuses on cryptocurrencies, the government should clarify the property properties of virtual currencies, establish an agency or system to handle cryptocurrencies, and examine third-party companies. He added: "This is a highly profitable business and attracts more and more people to join." Conclusion Although China has banned the trading and mining of digital assets, thousands of Chinese citizens still regularly use foreign exchanges and other peer-to-peer methods to access cryptocurrencies, mostly routing their transactions through overseas platforms or VPNs. This fact complicates government enforcement efforts as it can be difficult to distinguish between digital assets for personal use and cryptocurrencies by criminals. As debates over the confiscation of cryptocurrencies by criminals rage, policymakers may soon be forced to address the issue and draft new guidelines at the national level. Most observers believe it's time for the government to reconsider its stance and issue a regulatory official response that could reshape how China handles digital assets trapped in its regulatory grid.