China plans $1.2B Bitcoin sale amid crypto policy uncertainty
Beijing plans to offload 15,000 BTC to fund local projects
China is preparing to liquidate a massive cryptocurrency cache valued at over $1.2 billion, marking a pivotal moment in the country’s uneasy relationship with digital assets.
Local authorities are seeking court approval to sell approximately 15,000 Bitcoin—seized in criminal investigations—on offshore exchanges, according to documents reviewed by Reuters.
The move is driven by growing fiscal pressure at the municipal level, where governments face strained budgets. While China has banned all domestic crypto trading since 2021, a lack of clear national guidelines for managing confiscated digital currencies has led to fragmented, opaque practices across jurisdictions. The proposed offshore sales aim to circumvent the country’s strict regulatory framework while monetizing digital assets obtained through law enforcement.
Legal critics raise concerns over strategy
Legal scholars have expressed concerns over the legality and transparency of the planned sales. Chen Shi, a law professor at Zhongnan University of Economics and Law, criticized the involvement of private firms in offshore crypto disposals, calling the move inconsistent with China's outright ban on crypto transactions. He warned that such practices could foster corruption and undermine the integrity of legal institutions.
Winston Ma, a professor at NYU Law School, advocated for a centralized management model akin to the U.S. Department of Justice’s handling of seized digital assets. “A more centralized approach could help China better maximize the value of these cryptocurrencies,” Ma said, echoing calls for the establishment of a state-managed crypto reserve.
Market impact and future outlook
The impending sale has sparked anxiety among investors, who fear that a sudden influx of Bitcoin on offshore exchanges could put downward pressure on global crypto prices. Analysts warn that a sale of this magnitude—particularly amid ongoing U.S.-China trade tensions and shifting Federal Reserve policy—could trigger volatility in already sensitive markets. Some projections suggest Bitcoin could dip toward $80,000 in reaction to the liquidation.
Observers will be closely monitoring how the sale is executed and whether it sets a precedent for other jurisdictions grappling with crypto enforcement and asset management in a post-regulation world.
Additionally, we already wrote that China refuses to comply with Trump tariff demands.
