China’s Communist Party has expanded its anti-corruption agenda to include illicit activities involving virtual currencies and blockchain technology, urging authorities to take decisive action against financial misconduct facilitated by these tools.
The directive was outlined in a decision approved by the Party’s Central Committee on October 29 during the Fifth Plenary Session of the 20th Central Committee. State news agency Xinhua released the full document on November 1. The decision centers on the Party’s campaign for “full and rigorous Party self-governance,” which aims to reinforce internal discipline and strengthen accountability among officials.
The reference to crypto and blockchain appears in the document’s section dedicated to combating corruption. An English translation states that authorities should “resolutely crack down on corruption carried out through the internet, virtual currency, cross-border funds, blockchain and the like.”
Notably, the document does not directly identify Bitcoin or introduce specific measures targeting crypto trading, mining operations, or stablecoin activities.
Beyond digital assets, the directive calls for deeper investigations into increasingly sophisticated and concealed corruption practices. These include anticipated financial benefits, secretly arranged proxy ownership, the involvement of intermediaries referred to as “white gloves,” and the revolving door between government officials and private-sector businesses.
China’s Longstanding Restrictions on the Crypto Industry
The latest announcement follows China’s longstanding efforts to restrict cryptocurrency-related activities. Beijing has maintained a strict regulatory position on digital assets since 2013, when the People’s Bank of China (PBOC) and other authorities prohibited banks and financial institutions from handling Bitcoin transactions.
In September 2017, regulators strengthened their restrictions by banning initial coin offerings (ICOs) and cryptocurrency exchanges operating for mainland Chinese users. The crackdown intensified further in September 2021, when the central bank and other government agencies classified all cryptocurrency transactions as illegal and expanded restrictions on mining activities.
China has continued reinforcing its position through subsequent regulatory announcements. A central bank-led notice published on February 6 reiterated that virtual currency-related business operations on the mainland constitute illegal financial activities.
The notice also prohibited offshore stablecoins linked to the Chinese yuan and unauthorized tokenization of real-world assets, according to CryptoSlate’s summary of the regulatory announcement.
The latest Communist Party decision reinforces Beijing’s concerns about the potential use of digital financial technologies for concealing illicit transactions and facilitating corruption. However, the directive does not establish a new ban on individual cryptocurrencies or introduce separate restrictions on Bitcoin trading and mining. Instead, it places virtual currencies and blockchain alongside other channels that authorities intend to target as part of their broader anti-corruption campaign.
