Beijing police announced Thursday they will sell bitcoin and other cryptocurrencies seized in criminal cases through licensed exchanges in Hong Kong, creating China’s first official framework for disposing of confiscated digital assets.
The Beijing Public Security Bureau said it partnered with the China Beijing Equity Exchange to sell seized cryptocurrency via Hong Kong’s regulated markets. Proceeds will be converted to yuan and deposited in government accounts.
China currently holds approximately 194,000 bitcoin worth about $21 billion, ranking as the second-largest government bitcoin holder globally after the United States, according to BitcoinTreasuries.net data from December 2024.
The move addresses a growing challenge for Chinese authorities, who have accumulated billions in seized cryptocurrency while maintaining a strict ban on crypto trading and mining on the mainland.
Chinese authorities documented 2,206 cryptocurrency-related criminal cases from 2019 to June 2024. The value of crypto involved in crimes surged to $59 billion in 2023, a 10-fold increase from the previous year, according to blockchain security firm SAFEIS.
Beijing police said the new system has already been tested in one criminal case. Third-party agencies will handle the actual sales through Hong Kong’s 10 licensed crypto exchanges.
The arrangement highlights the regulatory distinction within China, where Hong Kong serves as a hub for digital assets while the mainland prohibits cryptocurrency activities. China banned crypto trading in 2021, forcing exchanges offshore and shutting down mining operations.
Local governments have increasingly relied on proceeds from seized crypto to supplement revenues amid economic pressures, though legal experts previously raised concerns about transparency in ad hoc disposal methods.
Under the new framework, selling agencies must provide deposits equal to 110% of asset values and complete transactions within 24 hours under government oversight.
Information for this story was found via the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
