Is trading cryptocurrencies illegal in China?

1. Trading cryptocurrencies is not illegal.

Currently, there is no law in China that explicitly prohibits individuals from holding or trading virtual currencies like Bitcoin. The policy stance can be summarized as 'not supportive, no safety net, risk borne by individuals'—individuals can buy and sell, but both profits and losses are borne by themselves, and the government does not provide protection for such transactions.

2. The illegal risks are concentrated in 'the methods of RMB inflow and outflow'.

The core issue is not the act of 'trading cryptocurrencies' itself, but rather the flow of funds. If virtual currencies are directly traded with RMB through bank cards, WeChat, Alipay, etc., it violates the central bank's regulatory provisions for payment institutions (such as the 'Notice on Preventing Bitcoin Risks' and the 'Notice on Further Preventing and Addressing Risks of Virtual Currency Trading Speculation').
It should be noted: Such behavior constitutes an administrative violation (rather than 'illegal activity' in the criminal sense), and banks and other institutions have the right to intercept or restrict related transactions.

3. A frozen bank card does not equal illegal activity.

When a bank card is frozen during cryptocurrency trading, it is often due to the transaction triggering the bank's risk control (such as involving suspicious fund flows). The 'account function' is frozen, not an indication of individual wrongdoing.
This situation will not leave a criminal record, nor will it directly lead to arrest. Typically, it can be resolved by contacting the bank to explain the situation and completing identity verification to unfreeze it, or by choosing to close the card and replace it. 'Risk control measures' should not be equated with 'criminal punishment'.

In summary: Trading cryptocurrencies is not illegal in itself, but one must be cautious of the compliance of funding channels. The risks of virtual currency trading are high and lack regulatory protection; it is essential to fully assess the risks before participating.