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Table of Contents
1. Major international regulatory attitudes
2. China's current legal policies
III. Analysis of regulatory trends
Conclusion
Home web3.0 Is virtual currency transaction legal?

Is virtual currency transaction legal?

Jul 22, 2025 pm 07:51 PM
Bitcoin digital currency Virtual currency usdt exchange Digital currency trading usdt trading Virtual currency trading

1. The legality of digital currency transactions varies from country to country: the United States and Japan have clearly defined legality and supervision, the EU and South Korea are restrictive, and prohibited by Algeria and other countries; 2. Institutions in China participate in illegal financial activities, individuals are not prohibited but transactions are not legally protected and they bear the risks themselves. Organizing transactions or involve illegal operations, cross-border redemption or violation of foreign exchange controls, and USDT transactions have been judged as illegal fundraising; 3. Global supervision is becoming stricter, and China's Hong Kong pilot license system has formed a difference from the mainland. Investors should pay attention to the revision of the Anti-Money Laundering Law and the progress of DCEP to predict the regulatory direction.

Is virtual currency transaction legal? - php Chinese

The legitimacy of digital currency transactions varies by country or region’s regulatory policies. The following analysis is based on the legal framework of major economies around the world and the current policies of China:

1. Major international regulatory attitudes

  1. Clarify legalized countries. The United States, Japan, Singapore and other countries will include digital currency transactions in the legal system, and require exchanges to comply with the anti-laundering (AML) and Know Your Customer (KYC) regulations. For example, Japan revised the Payment Services Act in 2017, recognizing Bitcoin as a legal means of payment.

  2. Restrictive and legal areas The EU has passed the Crypto Asset Market Supervision Act (MiCA) to establish unified rules, allowing transactions but requiring strict registration; South Korea only approves compliant exchange operations and prohibits anonymous trading.

  3. It is completely prohibited from banning countries such as Algeria, Bangladesh and other countries on the grounds of violating foreign exchange controls or religious laws.

  1. Prohibit financial institutions from participating
    In 2013, the People's Bank of China and five other ministries issued documents denied the monetary attributes of Bitcoin; in 2017, ICO was suspended and domestic exchanges were closed; in 2021, it was clarified that virtual currency-related businesses were illegal financial activities.

  2. Legality of individual holdings At present, the law does not prohibit individuals from holding digital currency, but transactions are not protected. According to Article 127 of the Civil Code, virtual property is protected by law, but in judicial practice, it is often ruled that transaction disputes are "at your own risk".

  3. Criminal Risk Boundaries

  • Organized transactions may be suspected of illegal business operations (Article 225 of the Criminal Law)

  • Cross-border redemption may violate foreign exchange management regulations

  • The Supreme Court of 2022 recognizes USDT transactions as an illegal fundraising channel

  1. Global FSB and other institutions promote the principle of "same risks, same regulation", and the 2023 G20 Summit reached a consensus on cross-border regulatory crypto assets.

  2. Hong Kong, China, has piloted the exchange license system (new regulations in June 2023), forming a differentiated exploration with mainland policies.

Conclusion

There are significant geographical differences in the legal risks of digital currency transactions, and investors need to specifically analyze local regulations. In China, it is clear that institutions conduct relevant business is illegal. Although personal transactions are not explicitly prohibited, they lack legal protection and may involve criminal risks. It is recommended to pay close attention to the revision of the Anti-Money Laundering Act and the progress of the Central Bank’s Digital Currency (DCEP), which will affect the future regulatory trend.

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