China's Crypto Conundrum: Seized Assets Fuel Underground Cash Conversion Craze

Listen up, crypto fans! Despite China's hardcore ban on crypto trading, local governments are raking in the dough by liquidating seized cryptocurrencies. You heard that right – they're cashing in on the digital assets they've confiscated!

China's stash of seized cryptos is ballooning, thanks to a never-ending stream of shady deals. And guess what? Local authorities are teaming up with private firms to turn those tokens into cold, hard cash, all while keeping it on the down-low.

Chen Shi, a sharp professor at Zhongnan University of Economics and Law, spilled the beans to Reuters, calling these disposals a "makeshift solution" that's not exactly playing by the rules of China's crypto ban. He's sounding the alarm for better oversight as crypto crimes keep climbing.

Beijing lawyer Guo Zhihao is also raising eyebrows, pointing out the clash between the crypto ban and the need to deal with seized tokens. He's straight-up saying that China's ban is at odds with local authorities' need to liquidate those digital currencies.

China sells seized crypto despite ban

Guo's got a bold idea – he thinks the People's Bank of China should step up and take charge of those cryptocurrencies. He's suggesting they either sell them overseas or build a crypto reserve from the seized tokens, just like Trump's been talking about.

Meanwhile, blockchain service provider Bit Jungle is telling Reuters that private companies can jump into the crypto disposal game, as long as they keep those assets safe, use licensed offshore exchanges, and play by the capital control rules.

Sun Jun, a crypto-savvy lawyer and senior partner at Shanghai Landing Law Offices, is calling it a "highly profitable business" that's drawing in more and more players. He's urging the government to clear up the legal status of virtual currencies, set up a proper system for getting rid of them, and keep a close eye on the private companies involved.

Let's not forget, China slammed the door on its local crypto exchanges back in 2017, putting a chokehold on the speculative market that made up 90% of global Bitcoin trading. And in September 2021, they dropped the hammer with a complete ban on all crypto trades. But it looks like the crypto cat is still finding ways to sneak out of the bag!