China's relationship with Bitcoin is paradoxical: the country banned all cryptocurrency trading and mining in 2021, yet the Chinese government is estimated to hold approximately 190,000 BTC in seized assets — making it potentially one of the largest sovereign Bitcoin holders in the world. China was also the dominant force in Bitcoin mining from 2013 to 2021, controlling at times over 75% of global hash rate before its sweeping ban.
Mining Era (2013-2021)
China dominated Bitcoin mining for nearly a decade due to:
- Cheap electricity: Particularly hydroelectric power in Sichuan and Yunnan provinces, and coal power in Inner Mongolia and Xinjiang
- Manufacturing base: Chinese companies like Bitmain, MicroBT, and Canaan produced the vast majority of Bitcoin mining hardware (ASICs)
- Scale: At its peak, Chinese mining pools controlled over 75% of Bitcoin's global hash rate
Major Chinese mining pools included F2Pool, AntPool, ViaBTC, and Poolin.
The Ban
China's crackdown on Bitcoin came in several stages:
- 2017: China banned initial coin offerings (ICOs) and ordered domestic cryptocurrency exchanges to close
- May 2021: The State Council's Financial Stability and Development Committee called for a crackdown on Bitcoin mining and trading
- June-July 2021: Provincial governments in Inner Mongolia, Xinjiang, Sichuan, and Yunnan shut down mining operations
- September 2021: The People's Bank of China (PBOC) declared all cryptocurrency transactions illegal, effectively completing the ban
The mining ban triggered the largest hash rate migration in Bitcoin's history. Over 50% of global hash rate went offline within weeks, before miners relocated equipment to the United States, Kazakhstan, Russia, and other countries. The network fully recovered within approximately six months.
Seized Bitcoin Holdings
China's massive Bitcoin holdings come primarily from law enforcement seizures:
PlusToken Ponzi Scheme
- 2019: Chinese authorities dismantled PlusToken, one of the largest cryptocurrency Ponzi schemes in history
- Approximately 194,000 BTC were seized along with other cryptocurrencies
- Chinese courts have ruled that seized crypto assets should be disposed of in accordance with law, but the status of many seized holdings remains opaque
Other Seizures
- Various seizures from fraud, money laundering, and illegal exchange operations
- Unlike the US, China has not established transparent tracking of government-held crypto wallets
Traceability Challenges
Unlike the United States or El Salvador, China's government Bitcoin holdings are largely opaque:
- No public wallet addresses have been officially disclosed
- The legal framework for disposing of seized cryptocurrency is unclear
- Some reports suggest portions of seized Bitcoin have been sold through intermediaries, though this is difficult to verify
- The PlusToken seizure wallets were tracked on-chain, but their current status is uncertain
Digital Yuan (e-CNY)
China has pursued its own central bank digital currency (CBDC), the digital yuan (e-CNY), as an alternative to cryptocurrency:
- Pilot programs began in 2020 across multiple cities
- The e-CNY is a centralized, state-controlled digital currency — philosophically opposite to Bitcoin
- Analysts have suggested that China's Bitcoin ban was partly motivated by the desire to clear the field for the e-CNY
News Timeline
| Date | Event |
|---|---|
| 2013-2017 | China becomes dominant Bitcoin mining country |
| Sep 2017 | ICO ban; domestic crypto exchanges ordered to close |
| Jun 2019 | PlusToken Ponzi scheme dismantled; ~194,000 BTC seized |
| May 2021 | State Council calls for crackdown on mining and trading |
| Jun-Jul 2021 | Mining ban enforced province by province; hash rate exodus |
| Sep 2021 | PBOC declares all crypto transactions illegal |
| 2022-2024 | Underground mining reportedly continues at reduced scale |
| 2024-2025 | Status of seized BTC holdings remains unclear |
News last updated: April 2026