Managing Seized Cryptocurrencies in China
In the wake of China’s stringent ban on cryptocurrency trading enforced in 2021, a significant challenge has emerged for local authorities regarding the management of seized cryptocurrencies. A recent investigation by a journalist from China News Service provided insights into how officials in Duyun City, located in the Qiannan Buyei and Miao Autonomous Prefecture of Guizhou Province, are addressing this complex issue through the Ministry of Public Security’s initiative known as “Guardianship in the Sun.”
Measures for Safeguarding Digital Assets
During an official media tour, it was revealed that certain individuals involved in criminal activity had transformed their illicit gains into digital currencies. To safeguard these prohibited assets during investigations, the Duyun law enforcement agencies have adopted measures including:
- Freezing of cryptocurrencies
- Securing them within a cold wallet that is physically cut off from other networks
These digital assets are housed in the local Joint Custody Center of Involved Property, awaiting further legal proceedings and judicial determinations.
Progress and Impact
This practice established by the public security department in Duyun represents a noteworthy development in the ongoing search for effective strategies to manage seized cryptocurrencies and other related assets. Since the facility began operating in November 2022, it has successfully processed over 24,000 items related to cases, including the retention of more than 20 million RMB in involved funds and the organization of upwards of 7,000 case files.
As Duyun continues to confront the challenges associated with the preservation and management of confiscated virtual property, its experience may serve as a critical reference point for other regions looking to enhance their own procedures in this evolving landscape.
