China Warns Crypto Anonymity is an Illusion
China's Ministry of State Security has issued a warning about the perceived anonymity of cryptocurrencies. The ministry claims that, despite their reputation for secrecy, blockchain transactions can be traced back to real-world identities.
The permanent records on public blockchains can be used in conjunction with off-chain data to connect wallet activity with users' names. This tracing model has become increasingly important in investigations involving cross-border scam and gambling networks.
China's current restrictions extend beyond the 2021 crackdown, with a new framework issued on February 6, 2026 widening the crypto ban. The framework prohibits domestic virtual-currency business activity, including exchange services, token issuance, and related intermediary services.
The ministry specifically warned people about approaching suspicious transactions involving cryptocurrencies, urging them to report any such activity through China's national security hotline or platform.