On the afternoon of June 21, Alipay officially released a heavy statement announcing a complete ban on virtual currency transfer transactions, upgrading the crackdown from four dimensions: transaction monitoring, payment interception, merchant management, and risk alerts.
This move is like a deep-water bomb, instantly igniting the cryptocurrency public opinion field. Data shows that within 24 hours of the statement's release, the scale of over-the-counter transactions (OTC) involving mainstream currencies such as Bitcoin and Ethereum plummeted by 47%, and over 3,000 individual accounts were restricted from receiving payments due to abnormal transactions.
This 'clearing operation' led by payment giants has unveiled the gray industrial chain behind virtual currency trading and sounded the alarm for ordinary investors.
I. Policy Intensification: Alipay Strikes with 'Four Measures' Against Virtual Currency
Alipay's ban is not a sudden move, but a continuous response to national financial regulatory policies. According to the content of the statement, its crackdown measures mainly include four core actions:
Full chain monitoring of trading behavior
Alipay has deployed an AI risk algorithm model, establishing a 24-hour inspection mechanism for key websites and accounts. Once transactions involving Bitcoin, Tether (USDT), and other virtual currencies are detected, the system will automatically trigger interception procedures, cutting off the transaction chain in real-time. Data shows that in the first quarter of 2025 alone, Alipay intercepted 127,000 suspicious transactions, involving amounts exceeding 2.3 billion yuan.
Precise interception at the payment stage
In response to the common “peer-to-peer transfer” model in over-the-counter transactions, Alipay has introduced a dynamic risk scoring system. When users transfer money to unfamiliar accounts, if the system determines that the recipient may be involved in virtual currency trading, a risk alert pop-up will be forcibly displayed, requiring users to confirm the purpose of the transaction. If users insist on making the transfer, the system will impose limits or freeze the recipient's account.
Strict screening for merchant access
Alipay has established a blacklist of virtual currency merchants, strictly prohibiting any merchants involved in virtual currency trading from accessing the platform. For signed merchants, Alipay uses blockchain address tracking technology to monitor the flow of funds in real-time. From 2024 to present, 217 merchants have been expelled for illegal trading, involving a transaction amount of 180 million yuan.
Three-dimensional coverage of risk alerts
Alipay is using multiple channels like app pop-ups, SMS notifications, and customer service hotlines to educate users about virtual currency risks. Data shows that in the first half of 2025, Alipay sent over 50 million risk alert messages to users, covering more than 90% of active users.
II. Regulatory Tracing: Why has Virtual Currency Trading Become 'The Most Hated?'
Alipay's thunderous action is backed by the country's long-term crackdown on virtual currency trading. As early as 2017, the central bank and seven other departments clarified that virtual currency does not have the status of legal currency and prohibited financial institutions from providing related services. In 2021, ten departments jointly issued documents characterizing virtual currency trading as illegal financial activity, requiring a complete cleanup of domestic trading platforms.
In May 2025, the People's Bank of China further issued a notice (regarding strengthening the regulation of digital currencies), clarifying the 'non-monetary attributes' and 'illegal financial activity boundaries' of virtual currencies, marking a shift in regulation from 'comprehensive ban' to 'limited compliance.'
The harmfulness of virtual currency trading mainly manifests in three aspects:
High concentration of financial risks
The price of virtual currency is highly volatile. In April 2025, Bitcoin plunged 8.65% in a single day, causing 446,500 people to be liquidated, resulting in losses of 1.381 billion dollars. Under high leverage trading, investors often lose everything.
A hotspot for money laundering crimes
The anonymity of virtual currency makes it a preferred tool for money laundering. In 2025, a smuggling case involving tobacco in Liuzhou, Guangxi, was solved, where the criminal gang transferred 28,625 USDT, involving an amount exceeding 17 billion yuan. Similar cases are frequently seen in cross-border gambling, telecom fraud, and other areas.
Disrupting financial order
Virtual currency trading leads to external circulation of funds, severely interfering with national macroeconomic control. In 2025, in an underground bank case solved by the Qingdao police, the involved funds circulated across borders through virtual currency, evading foreign exchange controls and posing a significant threat to financial security.
III. Industry Shock: Alipay's Ban Triggers a Chain Reaction
The impact of Alipay's ban quickly transmitted to the cryptocurrency ecosystem:
Shrinkage of over-the-counter trading channels
OTC trading volumes in leading exchanges like Binance and OKX have sharply decreased, and some merchants have turned to private trading via encrypted communication tools like Telegram. However, this “underground” operation further exacerbates the risk of fund safety. In May 2025, a fraud gang used USDT to scam 26 victims of over 4 million yuan, with the involved funds disappearing after being transferred through multiple wallets.
Complete contraction of payment channels
In addition to Alipay, institutions like WeChat Pay and UnionPay have also strengthened monitoring of virtual currency trading. In January 2025, WeChat Pay expelled 127 merchants suspected of virtual currency trading and imposed payment restrictions on 562 individual accounts.
Investor Risk Awareness Awakening
Alipay's risk alert measures have significantly enhanced user vigilance. In the second quarter of 2025, the volume of inquiries about virtual currency trading on the Alipay platform decreased by 34% year-on-year, while the number of users proactively reporting suspicious transactions increased by 210%.
IV. Risk Warning: How Can Ordinary Investors Avoid Pitfalls?
In the face of high regulatory pressure, ordinary investors should be alert to the following risks:
Compliance risks of trading platforms
Currently, all virtual currency trading platforms within the country are illegal, and investors also face legal risks when trading through overseas platforms. In 2025, Beijing police disposed of virtual currencies involved in cases through a compliant exchange in Hong Kong, converting 30 million Hong Kong dollars of Ethereum into cash and turning it over to the state treasury.
Risk of fund freezing
Even when trading through legitimate exchanges, accounts may be frozen due to the inflow of 'dirty money.' In January 2025, an investor's Alipay account was frozen for an amount of 120,000 yuan after selling USDT through Binance OTC, due to the buyer's unclear source of funds.
Legal liability risks
Participating in virtual currency trading may constitute illegal business operations, money laundering, and other crimes. In 2022, three men in Nanping, Fujian, were sentenced for selling game virtual currency under the crime of operating a casino, with a maximum sentence of one year and four months.
V. Regulatory Trends: What is the Future of Virtual Currency?
Against the backdrop of tightening global regulation, the virtual currency market is undergoing profound changes:
Exploration of compliance
Regions like Hong Kong and Singapore are promoting licensed operations of virtual currency exchanges. On August 1, 2025, Hong Kong's Stablecoin Regulation will officially take effect, and companies such as JD.com and Ant Group have applied for stablecoin licenses to explore compliant payment scenarios.
Technology-driven innovation
Decentralized exchanges (DEX) balance anonymity and compliance through zero-knowledge proof technology, with annual user growth of 89% and cross-chain exchange delays compressed to 1.2 seconds. This technological innovation poses new challenges for regulation.
Policy Dynamics Game
The U.S. Senate recently passed the (Genius Act) to establish a regulatory framework for stablecoin issuance; the EU passed the (Crypto-Asset Market Regulation) (MiCA) to unify stablecoin standards. China is exploring judicial disposal mechanisms for virtual currencies under the 'limited compliance' framework.
With regulatory pressure hanging over, investors must hold the bottom line
Alipay's comprehensive ban on virtual currency trading is an important part of the national financial regulatory system. For ordinary investors, it is essential to deeply understand the high risks of virtual currencies and stay away from speculative trading.
As a finance professor from a university in Beijing said: 'Virtual currency is not an investment product, but a risk amplifier.' In the current environment of strict regulation, only by firmly holding the legal bottom line can one avoid becoming a victim of financial dark wars.
As the global regulatory framework gradually improves, the virtual currency market will eventually return to rationality, and those participants who adhere to compliance amidst the chaos may find real opportunities in this transformation.
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