China faces regulatory gap in handling seized crypto assets, relies on local firms: report

Cryptocurrencies seized become an increasing source of income for local Chinese governments, despite the ban on the country of cryptographic trade.

As ChinaThe stack of cryptocurrencies entered continues to grow – thanks to a constant flow of illegal transactions – local governments are quietly turning to private companies to convert chips into cash, Reuters reports.

Chen Shi, professor at the University of Economy and Law of Zhongnan, told Reuters that such provisions a “makeshift solution which, strictly speaking, is not fully in line with the current ban on China on cryptographic trading”, which suggests that better surveillance is necessary as cryptographic crimes increase.

Guo Zhihao, a lawyer for the law firm in Beijing Yingke, also stressed that there is a conflict between crypto ban and the need to cope with china’s ban on the cryptographic trading “Conflicts with local authorities to liquidate digital currencies seized”.

China sells the crypto seized despite the ban

Guo believes that the Banque Populaire de China, the central bank of the country, should intervene because it is “better placed to manage cryptocurrencies, and should sell them abroad or build a reserve of crypto from tokens seized as Trump provides.”

Meanwhile, Blockchain’s service provider, Bit Jungle, told Reuters that private companies can legitimately help the elimination of cryptocurrencies, provided they safeguard assets, use offshore license exchanges and comply with capital checks.

Sun Jun, a lawyer and main partner focused on crypto-axrative, said that it is a “very profitable company that attracts more and more participants”, adding that the government should clarify the legal status of virtual currencies, establish an official system to dispose of them and detect private companies involved.

China farm Its local cryptocurrency exchanges in 2017, stifling the speculative market which represented 90% of the world trading in Bitcoin. In September 2021, the Chinese government presented A complete ban on all the professions of cryptography.