China’s Ministry of State Security said in a post on its official WeChat account that virtual currency has become an important tool for illegal and criminal activity, describing it as a breeding ground for money laundering, a cover for cyberattacks, and an accomplice in espionage and theft of secrets.
The post, titled "Virtual currency crimes cannot be traced? Think again!", said the claimed anonymity of virtual currency is, at its core, a false proposition. According to the article, blockchains are open and transparent, on-chain data cannot be altered, and transaction records are preserved in full, giving authorities a basis for end-to-end tracing. It also said that address anonymity only creates a temporary separation between a wallet address and a real identity, while fiat conversion can leave traces including device identifiers and IP addresses.
Ledger records, transaction paths, and private keys
The article summarized its argument with three points: examine the ledger, trace the transaction path, and look at the private key. It said transactions leave records throughout the process, making real identities difficult to conceal. It also warned that if a private key is held by an individual, there is no loss reporting or recovery mechanism, while assets kept by a platform carry risks if that platform collapses or loses contact.
The ministry also said that a February 2026 notice issued by the People’s Bank of China and multiple other departments reiterated that Bitcoin, Ether, and Tether should not and cannot circulate as currency, and that related business activities are illegal financial activities that are strictly prohibited.
The post warned the public to stay alert to high-paying part-time job offers settled in virtual currency. It said tips can be reported through 12339, www.12339.gov.cn, the ministry’s official WeChat account, or local state security authorities.