Chinese authorities use confiscated cryptocurrencies to replenish budget
Date: 2025-04-17 Author: Gabriel Deangelo Categories: IN WORLD
In China, regional authorities are resorting to the help of private firms to sell confiscated cryptocurrencies abroad. These measures allow replenishing local budgets, Reuters reports, citing court documents and transaction data.
According to experts, the lack of officially established procedures for the disposal of seized digital assets has created confusion and opacity. Lawyers express concerns that the lack of regulation of this issue could create grounds for corruption.
Over the past year, the sale of digital assets has become a significant source of income for the authorities. As of the end of 2023, regional departments owned about 15,000 BTC, which at the then exchange rate was about $1.4 billion. Now, according to the Bitbo platform, Chinese officials may already have 194,000 BTC in their accounts, which is equivalent to $16.3 billion. Thus, China ranks second in the world in terms of the volume of confiscated bitcoin - second only to the United States, where there are 207,189 BTC worth about $17.37 billion.
Chen Shi, a professor at the Zhongnan University of Economics and Law, in an interview with the agency noted that such actions by the authorities are contrary to the existing ban on cryptocurrency trading. At the same time, the number of crimes related to digital assets is growing rapidly. The judicial system is already considering more than 3,000 cases related to money laundering, online fraud and illegal gambling.
Experts interviewed by Reuters suggested two possible paths - either selling the confiscated cryptocurrencies with transparent reporting, or storing them in a special reserve, as is being discussed in the United States. Such an approach, in their opinion, will help control financial risks and increase trust in the actions of the authorities.
Experts also do not rule out that the government's interest in digital assets may increase against the backdrop of growing capital outflows and ongoing trade tensions between China and the United States. In support of this trend, former BitMEX CEO Arthur Hayes expressed the opinion that American tariffs could provoke a movement of funds from the Chinese yuan to Bitcoin, increasing interest in the latter as a safe haven asset.
