China announced plans to sell seized crypto via Hong Kong exchanges, marking the first time authorities on the mainland will formally liquidate confiscated digital assets. The initiative is being carried out in collaboration with the China Beijing Equity Exchange (CBEX), which will work with third-party agencies to conduct sales through regulated exchanges.
The assets, which were seized in criminal investigations, will be converted into yuan and placed into designated accounts. This process reflects Beijing’s continued ban on crypto activities within the mainland while leveraging Hong Kong’s regulatory framework to access liquidity and formal markets. Hong Kong’s established position as a digital asset hub provides a practical route for such disposals.
Seized crypto reaches record levels
Authorities in China reported that digital assets seized by the end of 2022 were worth billions of dollars, with the figure increasing to 430.7 billion yuan or around $60 billion in 2023. This represents a twelvefold increase year over year, highlighting the scale of enforcement actions since China intensified its crypto ban. These numbers place China among the countries holding the most significant volume of seized digital currencies globally.
According to recent estimates, China holds approximately 194,000 Bitcoins and 833,000 Ethereum. This figure is close to the holdings of the United States and the United Kingdom, which also manage large amounts of crypto from criminal cases. Despite its restrictive policies, China remains one of the top holders of digital assets seized through enforcement actions.
Hong Kong’s rising crypto profile
This liquidation effort further cements Hong Kong’s emerging role in the global digital asset landscape. While the mainland enforces strict regulations against cryptocurrencies, Hong Kong has embraced the industry under a controlled regulatory framework. The contrasting approaches allow China to benefit from digital asset policies in Hong Kong while maintaining tight domestic control.
More crypto businesses are moving to Hong Kong and top officials from China keep appearing at industry forums in the city. They point out that policy changes in Hong Kong might not be right for China’s main population. The proposal gives flexibility while ensuring Beijing still oversees the country’s financial affairs. Strategic move amid regulatory contrasts
Using Hong Kong as its route, China is able to benefit from the confiscated money without bending its own financial rules. This gives other nations a guide for finding a balance between laws and economic results when dealing with digital assets.
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