China Criminalizes Cryptocurrency Ownership, Prompting Market Response

China Bans Cryptocurrency Ownership Affecting Global Markets

China has implemented a total ban on cryptocurrency ownership, effective May 31, 2025, enforced by the People’s Bank of China and top regulatory bodies, affecting global markets.

The ban reflects China’s strict crypto stance, leading to immediate market declines and driving crypto activity to friendlier locales like Hong Kong and Singapore.

China’s Total Crypto Ban Moves Beyond Trading Restrictions

The People’s Bank of China and regulatory bodies enacted a ban on cryptocurrency, criminalizing ownership. This follows years of stringent policies aimed at controlling the sector and promoting their digital yuan.

Chinese authorities aim to curb decentralized cryptocurrencies by enforcing strict regulations. The total ban represents a significant escalation, moving from restricted trading and mining to outright ownership prohibition.

Market Shock as BTC, ETH, SOL Face Mass Sell-off

The global crypto market reacted with significant asset sell-offs, particularly BTC, ETH, and SOL. Major price drops followed as investors assessed the broader implications, including a trend of relocating operations overseas.

Financially, the immediate sell-off reflects volatility; meanwhile, regulatory shifts signal an increased reliance on China’s state-controlled digital currency. Historical trends suggest this ban may further entrench crypto markets in jurisdictions like Hong Kong and Singapore.

China’s First Ownership Ban Mirrors Past Regulatory Cracks

Previous bans in 2017 and 2021 triggered significant market reactions, but this move marks the first targeting cryptocurrency ownership. Past events saw temporary price drops and market adjustments primarily affecting Chinese-linked assets.

Experts from Kanalcoin suggest the firm shift to state-backed digital currency exemplifies China’s strategic financial planning. The trend of offshore migration continues, informed by analysis of prior patterns and expected technological adaptability.

According to new regulatory documents, as of May 31, 2025, owning cryptocurrency in China is a criminal offense under the latest policy update.

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