The Chinese local governments are trying to offload cryptos seized from individual asset ranges. In China, the authorities can now seize your crypto wallet if you have unmet fiscal debts or haven’t cleared your bills, EMIs, or rent.
But there is a big challenge underway. China has banned crypto trading and crypto exchange, especially. Hence, the local authorities are faced with subtle regulatory challenges.
According to a host of Chinese lawyers, the lack of rules around crypto makes the process murky. There are now real procedures to tackle seized crypto. However, the rule suggests that you may seize all cryptocurrency assets to balance unpaid debts or other financial liabilities at a financial level.
Amidst the deficit of regulatory rulings, there are fears that infidelities and corruption around seized cryptos might mar the strictness with which the Chinese government handles crypto trade.
What are The Local Authorities Doing?
Most Chinese local regulatory authorities are using private organizations to sell the seized cryptocurrencies. The usual destination of the seized coins is the offshore markets.
The digital assets are exchanged for cash that goes into the public funds. A recent Reuters report confirmed the same.
Till 2023, the Chinese local authorities had around 15000 BTC. The net worth of the same is around $1.4 billion. Afterwards, the whole asset was sold.
In all, China possesses 194,000 BTC, which is worth approximately $16 billion. China is also the second in the list of top BTC holders after the US.
The Controversy
According to the Zhongnan University of Economics, seized crypto sales are a makeshift solution. Conversely, the Chinese crypto ban policy doesn’t fully support the process. As crypto-related crimes are rising in China, the issue has caught the limelight.
China has gradually become the South Asian hub for online fraud and money laundering, which includes illegal gambling too.
Experts’ Take
Experts feel that China’s response to tariff policy can heavily devalue the local currency. That also indicates China can wind up the ban on crypto assets soon.
