Bitcoin News: China Local Govts Quietly Selling Despite Ban

Bitcoin price took a hit in late 2024, dropping 10% in weeks, leaving traders scrambling for answers. Was it global tariffs? Or a hidden force?

River, a Bitcoin investment firm, pointed to China, revealing the nation held 15,000 BTC—worth $1.4 billion—by December 2024, ranking it among the top 15 global holders.

Yet, despite a 2021 nationwide crypto trading ban, local governments are discreetly selling seized Bitcoin to patch budget holes.

This covert practice, reported by Reuters, raises pressing questions about transparency, legality, market stability, and policy enforcement.

Bitcoin News: China Turning Seized Crypto into Cash

Local governments are liquidating confiscated cryptocurrencies through private firms, sidestepping China’s crypto ban.

IN recent Bitcoin news, Reuters documented that Jiafenxiang, a Shenzhen-based tech firm, has sold over 3 billion yuan ($414 million) in digital assets since 2018, with transactions linked to authorities in Xuzhou, Hua’an, and Taizhou.

The sales surged after 2023, when blockchain security firm SAFEIS reported $59 billion tied to crypto-related crimes, resulting in over 3,000 prosecutions for fraud and illegal gambling.

Cas Abbe, a Web3 growth manager and Binance affiliate, highlighted these sales on X in early 2025, tying them to market dips.

“Local governments in China are selling seized crypto to top up their treasury,” Abbe posted. “This explains pretty much the dump even before tariff news hit the market.”

River’s 2024 data underscores China’s 15,000 BTC as a market mover when liquidated in Bitcoin’s $1.4 trillion ecosystem.

The sales occur in a legal gray area. China’s September 2021 crypto ban prohibits trading, but no regulations guide the disposal of seized assets.

An analyst questioned the process on X, stating that: “How are they even doing this legally?” The lack of transparency erodes trust in China’s crypto enforcement.

Local governments, facing inconsistent seizure policies, rely on firms like Jiafenxiang for offshore sales, exposing gaps in Beijing’s oversight.

Economic Pressures Push Action

Local governments grapple with severe financial strain. Rising debt and slowing growth have squeezed budgets.

River’s 2024 estimate of China’s $1.4 billion Bitcoin holdings offers a quick fix. Regions like Xuzhou and Taizhou convert seized assets to fund public services.

SAFEIS’s 2023 data, showing $59 billion in crypto crime, indicates a steady stream of confiscated tokens, fueling the liquidation trend. These sales are a pragmatic response to economic woes, despite clashing with national policy.

Experts demand reform to address the chaos. Proposals include recognizing crypto as legal assets and establishing disposal protocols.

Some suggest a national crypto reserve, echoing 2025 U.S. proposals under the Trump administration. Without action, sales risk market disruption.

Abbe’s X post linked China’s liquidations to Bitcoin’s 2024 price volatility, a concern backed by River’s data on China’s market influence.

China’s sales send shockwaves through crypto markets. Bitcoin’s late-2024 price swings aligned with reported liquidations, per Abbe’s X analysis.

SAFEIS’s 2023 crime figures suggest ongoing seizures will sustain sales, potentially depressing prices. With China holding 15,000 BTC, per River, traders now brace for sudden dumps in a $1.4 trillion market.

Crypto Policy Contradiction

China’s local governments are selling seized Bitcoin to survive economic hardship, defying Beijing’s crypto ban. Reuters reported $414 million in sales since 2018.

SAFEIS noted $59 billion in 2023 crypto crimes. River confirmed China’s $1.4 billion Bitcoin stash in 2024.

Abbe tied sales to market dips. As these transactions continue, they challenge China’s regulatory framework and global market stability, demanding urgent policy fixes.