Amid China strict ban on crypto trading, local governments are quietly offloading large stashes of seized digital assets in offshore markets—raising eyebrows about legal grey areas and potential corruption. According to a Reuters report published April 16, authorities across various provinces are engaging private firms to convert confiscated cryptocurrencies like Bitcoin into fiat currencies outside mainland China. Unclear Guidelines in China Fuel Concerns The report reveals that local governments collectively held around 15,000 Bitcoin—worth approximately $1.4 billion at the end of 2023—and have been liquidating them to boost strained public budgets. This practice, while helping refill government coffers, is taking place in the absence of clear national policy, prompting legal scholars and crypto observers to question both the legality and transparency of such moves. Lawyers speaking to Reuters warned that these ad-hoc methods could breed inconsistency and even misuse, given the lack of standardized procedures. Professor Chen Shi of Zhongnan University of Economics and Law remarked that these crypto liquidations, while pragmatic, don’t strictly align with China’s formal ban on crypto-related financial activities. Experts Suggest Reserve, Not Fire Sales China’s crypto dilemma is further complicated by a sharp rise in crypto-related crimes, from money laundering and online scams to illegal gambling. The state has prosecuted over 3,000 individuals for crypto-linked laundering alone in 2024. With crime on the rise and crypto assets piling up, the central government is under growing pressure to rethink how it manages seized digital wealth. One proposed solution is to move oversight to the People’s Bank of China, allowing the central authority to handle seized crypto in a consistent and regulated manner. Shenzhen-based attorney Guo Zhihao suggested that instead of haphazardly selling off assets, the country could consider establishing a sovereign Bitcoin reserve . This idea has gained traction especially as geopolitical tensions between the U.S. and China intensify. With the U.S. President Donald Trump planning to back crypto-friendly regulation and stablecoin development, the country may see value in maintaining a crypto war chest of its own. Ru Haiyang, co-CEO of HashKey in Hong Kong, echoed these sentiments, urging China to reconsider its stance and leverage crypto more strategically—perhaps by creating a sovereign crypto fund based in Hong Kong, where trading remains legal. The post Local Governments in China Are Quietly Selling Crypto Abroad: Report appeared first on TheCoinrise.com .