Mining Crypto in China: Law and Restrictions in 2025

Written By Ryan Fulton Tagged As crypto mining China China cryptocurrency ban crypto legality China digital yuan crypto mining restrictions

As of 2025, crypto mining in China is not just restricted-it’s a criminal offense. If you’re caught running a mining rig, even in your basement, you could face fines, asset seizure, or arrest. This isn’t a rumor. It’s the law. And it’s been building for over a decade.

How China Went from Crypto Capital to Crypto-Free Zone

In 2013, China started warning banks not to process Bitcoin transactions. That was the first crack in the door. By 2017, they shut down all domestic cryptocurrency exchanges and banned ICOs, calling them illegal fundraising. At the time, China still controlled over 70% of the world’s Bitcoin mining power. Miners were running huge farms in Sichuan and Inner Mongolia, using cheap hydropower and coal to crank out coins.

Then came 2021. The People’s Bank of China declared all cryptocurrency transactions illegal. Mining was banned nationwide. Thousands of operations shut down overnight. Miners packed up their rigs and moved to Kazakhstan, the U.S., and Canada. China went from being the heart of Bitcoin to a ghost town for miners.

But the crackdown didn’t stop there. In 2023, the government allowed blockchain tech-only if it was controlled by state-approved entities. Decentralized networks? Still banned. Then, on May 31, 2025, everything changed. Authorities announced a comprehensive ban on all cryptocurrency activities: mining, trading, holding, even receiving crypto as payment. Now, owning Bitcoin or Ethereum is a legal risk.

Why Did China Ban Crypto Mining?

It wasn’t just about control. There were four clear reasons.

First, energy use. Bitcoin mining guzzles electricity. In 2020, Chinese mining operations used more power than the entire country of Argentina. That clashed with China’s 2060 carbon neutrality goal. Coal-fired plants in Inner Mongolia were running 24/7 to power rigs. The government couldn’t afford that kind of emissions.

Second, financial control. Crypto moves money outside the banking system. People could send value overseas without going through the State Administration of Foreign Exchange. That meant capital flight-rich Chinese citizens moving wealth out of the country. The government saw that as a threat to economic stability.

Third, crime. Crypto was tied to money laundering, fraud, and underground markets. In 2024, Chinese authorities seized over $2.3 billion in crypto-linked assets from illegal operations. They traced transactions from darknet markets to offshore wallets. The link was undeniable.

Fourth, the digital yuan. China spent over $10 billion developing its own central bank digital currency-the e-CNY. It’s fully traceable, government-controlled, and integrated into every payment app. They didn’t want a rival. Bitcoin and Ethereum? They’re decentralized. Untrackable. Uncontrollable. That’s the opposite of what the Chinese state wants.

How the Ban Is Enforced

It’s not just police knocking on doors. China uses a network of high-tech monitoring tools.

Electricity providers now report abnormal power usage to the government. If a factory in Guangdong suddenly starts using 5 megawatts of power at night-with no industrial equipment running-it triggers an alert. Miners often hide rigs in warehouses or repurpose data centers. But the grid knows.

Banks are required to flag any transaction involving crypto wallets. If you deposit $10,000 from a Bitcoin exchange, your account gets frozen. The People’s Bank of China cross-checks this data with the Cyberspace Administration, which tracks digital wallet addresses and blockchain activity.

The Ministry of Industry watches for bulk purchases of ASIC miners. If a company orders 500 Antminer S21 units, regulators show up. They don’t need proof of mining-just the equipment purchase is enough to start an investigation.

In 2024, over 300 people were arrested for crypto mining. Assets-including homes, cars, and mining rigs-were seized. Some miners got jail time. Others paid fines up to 10 times the value of their crypto holdings.

A government drone scans an abandoned mining farm with red alert beams at night.

Is Mining Still Happening in China?

Yes-but underground. And it’s getting harder.

Studies from the University of Cambridge estimate that China still accounts for 12-15% of global Bitcoin hashrate as of late 2025. That’s down from 70% in 2020, but it’s not zero. These are small, scattered operations: a few rigs in a rural home, hidden in a basement, powered by stolen grid electricity.

The risks are huge. If caught, you’re not just losing your gear. You’re risking criminal charges. And with AI-powered energy monitoring and facial recognition in mining districts, detection rates are rising.

Some miners use solar panels or backup generators to avoid grid detection. Others mine during power outages, when monitoring systems are offline. But these are short-term hacks. The government’s tools are getting smarter. By 2026, they plan to roll out nationwide AI systems that predict mining activity based on usage patterns-before it even happens.

What Happened to the Miners Who Left?

The exodus reshaped the global crypto mining industry.

The U.S. became the new leader. Texas, Georgia, and Washington State now host over 35% of the world’s Bitcoin mining. Companies like Riot Platforms and Marathon Digital moved entire farms across the Pacific. They got tax breaks, cheap natural gas, and friendly regulators.

Canada, Kazakhstan, and even Iceland picked up the slack. Kazakhstan’s mining output jumped 200% after China’s 2021 ban. But it came with its own problems-blackouts, corruption, and unstable power grids.

The result? A more decentralized, resilient network. Bitcoin’s hashrate didn’t drop-it grew. Miners in the U.S. and Europe now use more efficient hardware, powered by renewable energy. The shift forced innovation. ASIC chips today are 40% more efficient than those made in 2020.

A family burns crypto hardware as a digital yuan app glows on a child's phone.

What About the Market?

When China announced the May 2025 ban, Bitcoin dropped from $111,000 to $104,500 in 24 hours. Ethereum fell 18%. Altcoins like Solana and Cardano lost over 25%. Over $750 million in leveraged positions were liquidated.

Why? Because investors knew China’s ban wasn’t just about mining-it was about total elimination. No trading. No holding. No exceptions. That scared the market. It signaled that the world’s most powerful economy was fully committed to killing crypto.

But here’s the twist: the long-term impact has been positive for crypto. The ban proved that decentralized networks can survive state crackdowns. Miners didn’t disappear-they adapted. The network kept running. Bitcoin’s security improved as hash power spread across more countries.

The Future of Crypto in China

There’s no coming back.

The digital yuan is now used by over 800 million people. It’s embedded in Alipay, WeChat Pay, and government salary systems. It’s the future. And the government won’t tolerate anything competing with it.

New laws passed in 2025 make it illegal to even mention cryptocurrency in public forums if it’s presented as an investment. Social media posts promoting crypto mining can be deleted, and accounts suspended.

For anyone still thinking about mining in China: don’t. The risk isn’t worth it. The penalties are severe. The tools to catch you are everywhere. And the government has zero interest in reversing course.

The only legal way to interact with crypto in China now? Buy it on a foreign exchange, store it in a wallet, and never tell anyone. Even then, you’re playing with fire.

What This Means for the Rest of the World

China’s ban didn’t kill crypto-it forced it to grow up.

It proved that decentralized networks can’t be shut down by one country. It pushed mining toward cleaner energy. It made the network more distributed and secure.

But it also showed how powerful a state can be when it decides to eliminate something. If China can ban crypto with this level of control, what’s stopping other governments from trying?

The lesson? If you’re mining or trading crypto, understand the legal landscape where you live. And never assume it’s safe-because regulations can change overnight.

There are 24 Comments

Rishav Ranjan

China just banned it. Done. Move on.
Steve B

The state's sovereignty over digital value is not merely a policy-it is an ontological assertion. To mine is to defy the metaphysical order.
Rebecca F

So now you're a criminal for owning a computer that does math? Brilliant. Just brilliant.
Ashley Lewis

The regulatory clarity is commendable. Decentralized systems inherently undermine institutional legitimacy.
Jacob Lawrenson

This is why crypto is winning 😎 The network just got stronger. Miners didn't die-they evolved. 🚀
Zavier McGuire

they banned it but people still mine? sounds like a classic case of dont ask dont tell
Luke Steven

It's fascinating how power reacts to things it can't control. China didn't ban crypto because it's dangerous-it banned it because it's free. And freedom scares centralized systems.
Ellen Sales

so china made the digital yuan and now everyone has to use it? sounds like they just turned the entire country into a walmart loyalty program
Vijay n

this is all a distraction the real agenda is population control and ai surveillance the crypto ban is just the tip of the iceberg
Alison Fenske

I feel bad for the miners who lost everything. But also... I get why the government did it. Energy waste + capital flight = bad combo.
Jayakanth Kesan

Cool read. China's move is harsh but predictable. They play the long game.
Tristan Bertles

The fact that mining still exists underground shows how resilient this tech is. People will always find a way to run code they believe in.
Earlene Dollie

I can't believe people still think this is a good idea. You're literally risking your freedom for digital numbers. I'm shaking my head.
Dusty Rogers

The real story isn't the ban. It's that Bitcoin kept going. That's the win.
Kevin Karpiak

China knows what's best. If you're mining crypto you're helping the west undermine our sovereignty. This is patriotism.
Amit Kumar

Bro in India we still mine in basements with stolen power. They arrest you? Cool. But the rigs keep spinning. The grid doesn't know who's who. We're ghosts now.
chris yusunas

Africa is next. They'll ban it too. But the rigs will still hum in the dark. Power outages? Perfect time to mine.
Naman Modi

They banned it but they still use it to pay bribes lol. Hypocrisy is the national sport
Mmathapelo Ndlovu

It's sad but also kind of beautiful. Like nature finding a crack in concrete 💚
Tyler Porter

I'm just saying... if you're going to risk jail, at least use solar panels. Be responsible.
Sheila Ayu

Wait, so you can't even mention crypto as an investment? That's censorship. That's not law, that's brainwashing.
Janet Combs

i think theyre just scared people will stop using the yuan. its not about crypto its about control
Radha Reddy

The digital yuan is not a replacement-it is an evolution. China is building the financial infrastructure of the 21st century, and it is not open-source.
Shubham Singh

How quaint. The West calls this freedom. We call it economic anarchy.