The Ministry of State Security of China has issued a warning regarding the risks associated with cryptocurrencies. The agency characterized digital assets as tools for money laundering, cyberattacks, and espionage, noting that foreign intelligence services may use them to fund illicit activities.
The ministry emphasized that the anonymity of crypto transactions is an illusion. According to the agency, blockchain technology maintains a permanent history of transactions, and interactions with payment services or fiat exchanges allow authorities to link digital addresses to real identities.
This warning aligns with Beijing's ongoing restrictive policy toward the sector. China banned ICOs and shut down exchanges in 2017, followed by a total ban on mining and crypto businesses in 2021. In February, authorities extended these restrictions to include tokenized real-world assets.
Despite the mainland's strict stance, the Hong Kong Special Administrative Region continues to develop its own regulated digital asset market. Meanwhile, in July, the Supreme People's Procuratorate of China released new guidelines specifically targeting money laundering activities involving cryptocurrencies.
