China Might Be Rethinking Its Strict Crypto Crackdown

• China may be rethinking its crypto stance as legal authorities explore new approaches to related cases.
• Hong Kong’s crypto-friendly policies could hint at broader interest from mainland China’s regulators.

For years, the Chinese government has been tough on Bitcoin and other crypto assets. In 2021, the government imposed a blanket ban, seemingly shutting down all forms of cryptocurrency trading and mining on the mainland. But now, there’s a whiff of change—and it’s coming from Hong Kong.

Recently, the CEO of a Hong Kong ETF issuer disclosed that mainland Chinese regulators seem to be considering a review of their policies regarding Bitcoin and digital assets. Behind those statements are some interesting moves that could be read as early steps toward bigger changes.

BREAKING:

HONG KONG ETF ISSUER SAYS CHINA
WILL “RECONSIDER ITS STANCE” ON
BITCOIN AND CRYPTO POLICY.

CHINA FUD TO CHINA FOMO 🔥 pic.twitter.com/lmqR2ipNYl

— Ash Crypto (@Ashcryptoreal) March 24, 2025

Hong Kong Moves First, but Who’s Really Watching?

Hong Kong is known for having its own financial system, distinct from mainland China. Because of its “one country, two systems” status, the city is often used as a place to try out things that can’t be directly implemented on the mainland. Including the world of crypto.

Hong Kong recently authorized the launch of spot ETFs for Bitcoin and Ethereum—the first in Asia. Meanwhile, the government is also drafting new tax policies that benefit hedge funds and family offices looking to invest in digital assets. Is this just a local initiative? Or is it a sign that mainland China is watching from afar?

China’s Crypto Wall Might Be Starting to Crack

Interestingly, in late February 2025, CNF reported that Chinese legal authorities were beginning to study how to handle crypto-related cases while maintaining the national ban that has been in place for more than three years. Meanwhile, China’s central bank remains aggressive in strengthening its oversight of the global crypto market under its financial stability roadmap.

Furthermore, figures like Yifan He of Red Date Technology, who once believed that the chances of China lifting the crypto ban were 0%, now say they see a more than 50% chance of it happening in the next three years. These are not just anyone’s words, and they are worth noting.

Billions in Crypto, But Is It Still There?

In March 2025, reports emerged that the Chinese government was apparently holding a large amount of crypto assets—seized from the PlusToken fraud scheme that collapsed in 2019. The numbers are not small, there are 194,000 BTC, 833,000 ETH, 487 million XRP, and 6 billion DOGE, with a total value of around $21.167 billion at press time.

Imagine if someone claimed to hate cheese but secretly kept a crate of cheese in the fridge. That’s how ironic this feels.

However, not everyone believes that these assets are still intact. Economist Peter Schiff, for example, criticized US Senator Cynthia Lummis’ statement that China could compete with the US in accumulating Bitcoin. Schiff even argued that China might have sold all its BTC by January 2025.