Multiple departments collaborate, and seven associations speak out together: the policy closed-loop for China's crypto market has officially taken shape

Thirteen departments jointly halt illegal virtual currency activities, and seven industry associations issued risk alerts during the same period. Relevant agencies then initiated spot checks—what does this series of actions reflect?

Over the past two weeks, the most discussed issue in the crypto circle has been: Is this a new round of “comprehensive ban,” or a necessary cleanup before market adjustment? A careful review of these policy documents reveals that the regulatory focus has never been on ordinary crypto investors. The true core targets are: issuance of air coins, money laundering with穴定币, illegal RWA activities, cross-border capital outflows, and pyramid-style mining activities disguised as “human-mined” operations.

Complete Closure of Policy Chain: Full Lockdown of Funds, Products, and Platforms

The strength of this coordinated response last appeared in September 2021. That time, it directly led to over 300 exchanges withdrawing from the Chinese market, and global mining hash rate dropping from 75% to 2%. This time, the coverage is even more comprehensive:

Banks and Payment Systems: Cut off capital channels for buying, selling, and cross-border transfers of virtual currencies

Securities, Funds, and Futures Associations: Ban tokenized securities and virtual fund products

Internet Finance Association: Clean up Web3 promotion channels and trading traffic diversion behaviors

Listed Companies Association: Prevent enterprises from covertly financing via tokens

In other words, every touchpoint where virtual currency could be accessed—funds, products, platforms, institutions, publicity—is being simultaneously shut down in this round.

Statistics show that by 2025, China’s underground OTC market is about 50 billion RMB, and the banking system has intercepted over 12,000 suspicious buy-coin transfers involving 4.6 billion RMB. This is not just “cracking down” but systemic isolation.

RWA First Explicitly Denied: Why Now?

The most shocking statement in this risk alert is: “Our country’s financial regulatory authorities have not approved any real-world asset tokenization activities”—note the use of “not approved any” rather than “not yet approved,” which is an absolute denial, leaving no room for interpretation.

Globally, RWA is no longer a niche concept. BlackRock’s BUIDL fund has a scale of $2 billion, and giants like JPMorgan, Citi, and Fidelity are deploying on-chain bonds and on-chain settlement. The global RWA market exceeds $30 billion.

However, these “international compliant” RWA projects are not recognized within China’s regulatory framework. Deeper consideration shows that allowing “China property RWA” would directly lower the threshold for capital outflows—during 2015-2016 RMB devaluation, China lost nearly one trillion USD in foreign reserves due to capital flight. The current regulatory stance is: this door must remain closed, with zero tolerance.

Full Tightening of Four Policy Lines

The key activities targeted by the documents are layered and progressively point to substantive risks:

Air coins phenomenon: represented by π coins, characterized by zero technology, no application scenarios, high centralization, opaque issuance mechanisms, and reliance on pyramid promotion. Many regions have already classified them as pyramid schemes. The regulatory goal is clear—crack down on scams, not ban trading.

穴定币 ecosystem: the People’s Bank of China’s November meeting confirmed stablecoins as virtual currencies, with risks focused on cross-border money laundering, suspected scam fund flows, and OTC circumvention of banking regulation. These are issues in financial security, unrelated to crypto investment itself.

Mining industry risks: China once controlled 75% of global hash power, so mining has always been a regulatory focus. Currently, the most dangerous are not legitimate mining farms but capital schemes disguised as “human-mined” or “cloud computing power”—these projects cloak mining as external operations, but in reality, they are typical Ponzi schemes, with 90% being fundamentally fraudulent.

Illegal RWA financing: covert financing, cross-border asset transfers, and regulatory arbitrage are core risks.

Together, these four directions aim to eliminate the parts of private crypto activities that could pose systemic financial risks—while “speculating on coins” is not on the crackdown list.

Historical Perspective: Why Is China’s Regulatory Attitude the Most Resolute?

The 1998 Asian financial crisis left a deep imprint on China. Thailand’s collapse, Indonesia’s political turmoil, Korea’s bankruptcy—hot money’s impact can destroy a country’s monetary system. Hong Kong only barely held its peg with HKD 11.8 billion. This experience made China extremely sensitive to “cross-border capital shocks.”

In 2009, when offshore RMB was just starting, strict restrictions were imposed. The individual annual $50,000 foreign exchange quota was not arbitrary but designed to prevent disorderly capital outflows during RMB internationalization. The essence of stablecoins and RWA is to bypass banking systems through “covert foreign exchange purchases,” touching the core red line of policy.

Over more than a decade from 2013 to 2025, regulators witnessed Bitcoin soaring from $13 to $1,100, Mt.Gox exchange collapse, ICO bubble burst, Luna’s $40 billion market cap evaporate, and a total of $270 billion in liquidation losses in 2024-2025. Each regulatory adjustment occurred during overheated industry phases and frequent scams—this time is no different.

Is This Negative or a Confirmation of Safety Boundaries?

For ordinary investors, the core meaning of this policy document boils down to three points:

First, stay away from air coins—tools used by scammers to harvest participants.

Second, do not participate in pyramid mining and cloud computing projects under the guise of “human-mined” activities—90% of these are Ponzi schemes.

Third, avoid money laundering, cross-border transfers, and illegal RWA financing involving stablecoins—these are financial crimes and absolute red lines.

As long as you avoid these three, you are an ordinary crypto asset holder—this policy does not target this group.

From another perspective: Trading coins is okay, but capital outflow is not; investing is okay, but “cutting leeks” (exploiting others) is not; research is okay, but illegal issuance is not. The game rules of the entire industry have finally stabilized.

Over the past decade, China’s crypto regulation has often been misunderstood internationally as a “total ban.” In reality, regulation has never prohibited holding, researching, or learning about virtual assets. What is truly banned are activities that threaten financial order, deceive the public, and cause capital outflows.

When the policy boundaries are finally clarified, the market will become healthier. For participants, remember one thing: avoid high-risk behaviors explicitly named in policies; others can participate with peace of mind.