Asher Draycott Dec
14

Crypto Exchanges to Avoid if You Are Chinese: Legal Risks and Real Consequences

China Crypto Risk Assessment Tool

Based on the June 1, 2025 Chinese regulations, this tool assesses your risk level for cryptocurrency activity. All crypto trading is now illegal for Chinese citizens with severe consequences.

Are you a Chinese citizen?

Yes

Where are you located?

Have you been involved with cryptocurrency?

Yes, I've traded or held crypto

No, I haven't

Financial exposure level

If you're a Chinese resident, using any cryptocurrency exchange right now isn't just risky-it's illegal. As of June 1, 2025, the People's Bank of China (PBOC) made every form of crypto trading, mining, and ownership a criminal offense. That includes Binance, Coinbase, Kraken, OKX, Huobi, KuCoin, Gate.io, and every other platform you've ever heard of. Not because they're shady. Not because they're unstable. But because the Chinese government has declared them all off-limits-with zero exceptions.

There Is No Legal Way to Trade Crypto in China

You might think, "What if I use a VPN?" or "What if I trade through a friend overseas?" Those ideas won’t protect you. The 2025 ban doesn’t just target exchanges-it targets you. The law applies to any Chinese citizen, no matter where they are physically located. If your ID is Chinese, your bank account is in China, or your phone number is registered in China, you’re covered by this rule. The government doesn’t care if you’re in Shanghai, London, or Bangkok. If you’re Chinese, you’re not allowed to touch crypto.

Financial institutions in China are required to monitor every transaction for signs of crypto activity. If your account sends money to a known crypto wallet, even once, it triggers an automatic alert. Banks freeze accounts. Payment platforms like Alipay and WeChat Pay shut down services. In some cases, people have been fined tens of thousands of yuan-or worse, criminally charged.

Every Major Exchange Is Blocked

Let’s be clear: Binance is banned. So is Coinbase. Even Huobi, which started in China, can’t serve Chinese users anymore. The same goes for OKX, KuCoin, Gate.io, and Bitfinex. It doesn’t matter if the exchange claims to block Chinese IPs. If you’re identified as a Chinese resident, your access will be cut off-and your account may be frozen or reported.

Decentralized exchanges (DEXs) like Uniswap or PancakeSwap aren’t safe either. The law doesn’t distinguish between centralized and decentralized platforms. If you’re using a wallet to swap tokens, and that wallet is linked to your identity or bank account in China, you’re breaking the law. Even peer-to-peer (P2P) trading platforms are now illegal. The government has cracked down on OTC desks that used to let people buy Bitcoin with WeChat Pay. Those services have vanished.

How Enforcement Works in Real Life

The Chinese government didn’t just write a law-it built a system to enforce it. A national task force, made up of the PBOC, the Ministry of Public Security, and internet regulators, monitors crypto activity 24/7. They use AI to scan online forums, social media, and messaging apps for keywords like “Bitcoin,” “USDT,” or “crypto wallet.” If you post about buying crypto, even in a private group, it can be flagged.

Offline, bank employees are trained to spot suspicious transfers. If someone deposits 10,000 yuan into an account and then immediately withdraws it to a foreign exchange, that’s a red flag. Authorities don’t need proof you traded crypto-they just need evidence you tried. In 2024, over 1,200 cases of crypto-related violations were prosecuted in China. Penalties ranged from fines to prison sentences of up to three years.

One real case: a 28-year-old man in Guangzhou used a friend’s overseas account to buy Ethereum. He didn’t trade it. He didn’t sell it. He just held it. The bank flagged the transaction. He was fined 80,000 yuan (about $11,000 USD) and banned from opening any new financial accounts for five years. No trial. No appeal. Just enforcement.

An elderly woman planting rice with digital yuan coins, as crypto logos dissolve into paper cranes.

Why China Banned Crypto-And Why It Won’t Change Soon

China’s ban isn’t about fear of volatility. It’s about control. The government sees cryptocurrencies as a threat to its monetary sovereignty. If people can move money outside the state’s system, it weakens the central bank’s power. That’s why they created the digital yuan-a state-controlled digital currency that tracks every transaction, enforces spending limits, and blocks payments to forbidden categories (like crypto exchanges).

Compare this to the U.S. or EU. They regulate crypto. They license exchanges. They require KYC. China doesn’t want regulation. It wants elimination. The 2025 ban is the final step in a 16-year campaign that started in 2009 with restrictions on virtual currency purchases, then moved to banning Bitcoin exchanges in 2017, mining in 2021, and now, total prohibition.

There’s no sign this will change. The digital yuan is being rolled out nationwide. Over 600 million people now use it for daily payments. The government sees it as the future-not Bitcoin or Ethereum. Until that changes, crypto remains illegal.

What Happens If You Ignore the Ban?

Some people still try. They use fake IDs, offshore bank accounts, or crypto mixers. But here’s what actually happens:

Your bank account gets frozen without warning.
Your phone number gets blacklisted from mobile payment apps.
You’re added to a national financial blacklist-you can’t get loans, open new accounts, or even rent an apartment in some cities.
If you’re a business owner, your company can be shut down.
In extreme cases, you face criminal charges for “illegal fund transfer” or “financial fraud.”

There is no safe gray area. Even holding crypto as an investment is illegal. The law doesn’t care if you bought it before 2025. If you still have it, you’re in violation. Authorities can seize your assets at any time.

A teen closing a laptop as a fox spirit leaves digital yuan blossoms on bookshelves at night.

Your Only Legal Options

If you live in China, your financial options are limited-but not gone. You can still:

Use the digital yuan for payments, savings, and government services.
Invest in state-approved funds-mutual funds, bonds, or real estate investment trusts (REITs).
Use Alipay or WeChat Pay for everyday transactions.
Save in traditional bank accounts with fixed interest rates.

These aren’t glamorous. They don’t promise 10x returns. But they’re legal. And in China, legality is the most valuable asset you can have.

What About Expats or Dual Citizens?

If you hold Chinese citizenship-even if you live abroad-you’re still bound by this law. China doesn’t recognize dual citizenship. If you’re a Chinese passport holder, you’re considered a Chinese citizen under Chinese law, no matter where you live. That means if you try to trade crypto while visiting China, or even if your family back home uses your overseas account, you could be implicated.

Foreign nationals living in China can legally trade crypto through foreign exchanges-but only if they don’t use Chinese bank accounts, phone numbers, or IDs. Even then, they’re monitored. Many expats have had their bank accounts closed after using crypto services. The risk isn’t worth it.

Bottom Line: Don’t Risk It

There’s no such thing as a “safe” crypto exchange for Chinese residents. Every platform that accepts Chinese users is breaking Chinese law-and so are you if you use them. The government isn’t bluffing. The enforcement is real. The penalties are severe.

If you’re Chinese and you want to invest in digital assets, your only legal path is the digital yuan. Everything else is a gamble with your freedom, your finances, and your future.

Asher Draycott

I'm a blockchain analyst and markets researcher who bridges crypto and equities. I advise startups and funds on token economics, exchange listings, and portfolio strategy, and I publish deep dives on coins, exchanges, and airdrop strategies. My goal is to translate complex on-chain signals into actionable insights for traders and long-term investors.

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