China to Sell Confiscated Cryptocurrencies Through Hong Kong Exchanges

China has announced plans to sell seized digital assets through licensed exchanges in Hong Kong. The initiative is partnering with the China Beijing Stock Exchange (CBEX) to manage digital assets seized in criminal cases. Under the initiative, CBEX will hire third-party agencies to help sell the assets on regulated exchanges.

For the first time, a mainland Chinese agency has processed seized digital assets by converting them into yuan and depositing them into a designated account. This is possible because Hong Kong is a digital asset hub, even though mainland China still bans cryptocurrency trading.

China's Cryptocurrency Crackdown Shows the Scale of Assets Seized
China has just established its first legal framework to handle seized digital assets, with the total value set to surpass $60 billion by 2023 – a 12-fold increase from the previous year. Despite still banning cryptocurrencies, China is now one of the largest holders of digital assets, along with the US and the UK.

Rumors of a ban on individuals owning cryptocurrencies have not been officially confirmed, but the 2013 ban on financial institutions remains in effect.

Hong Kong cements its position as a cryptocurrency hub
The seizure of large amounts of digital assets poses both a challenge and an opportunity for China.

Despite concerns about the impact on the market if a massive sale is carried out, many have called for the assets to be turned into legitimate resources for public use. Beijing’s choice to liquidate through Hong Kong exchanges reflects a “two-pronged” strategy between the mainland’s ban and Hong Kong’s openness.

The region is becoming a testing ground for digital currency policy, allowing China to maintain control while exploring the potential of blockchain technology. The relationship opens a channel between China and the global crypto economy.