Recently, Chinese legal, financial, and government departments have engaged in intensive discussions around the "disposal mechanism for seized Crypto Assets." As cases of crimes related to Crypto Assets have surged, the practice of local governments selling seized digital assets to supplement their finances has drawn widespread attention. Additionally, the lack of an existing regulatory framework has led to a chaotic disposal process, insufficient transparency, and even the risk of corruption.
Currently, local governments in China are facing an awkward reality in the field of Crypto Assets: despite the national ban on Crypto Assets trading and mining since 2021, the scale of Crypto Assets seized by local governments through crackdowns on criminal activities continues to expand. Data shows that in 2023, the amount involved in criminal cases related to Crypto Assets in China reached 430.7 billion yuan (approximately 59 billion USD), a tenfold increase compared to 2022, with case types covering online fraud, money laundering, illegal gambling, and more. During the same period, national prosecuting authorities prosecuted 3,032 individuals for Crypto Assets money laundering cases, setting a historical new record.