Shanghai court sentences five to six years for $29M crypto fraud

A Shanghai court has handed down prison sentences ranging from five to six years to five individuals involved in illegal cross-border cryptocurrency transactions totaling more than $29.4 million. The case centered on unauthorized foreign exchange operations that used digital assets as a bridge to move money across borders, skirting China’s notoriously tight capital controls.

What happened and why it matters

Beijing banned commercial cryptocurrency activities years ago, including trading, mining, and any transfers that function as unauthorized foreign exchange. Each of the five received sentences between five and six years. No appeals or additional charges were detailed in initial reporting.

The identities of the defendants, the specific cryptocurrencies used, and the blockchain protocols involved have not been publicly disclosed.

A 2025 Beijing ruling addressed $166 million in similar money laundering schemes using USDT stablecoins, making the Shanghai case look almost modest by comparison.

China’s evolving stance on crypto

China has maintained a blanket ban on commercial crypto activities since 2021, when regulators declared all cryptocurrency transactions illegal. Mining operations were shuttered. Exchanges were booted.

Chinese courts have occasionally issued rulings that suggest personal ownership of digital assets may carry property-like legal status, separate from the prohibition on commercial transactions. Shanghai rulings from 2024 deemed assets like Bitcoin as virtual property or commodities. China maintains strict limits on how much money citizens can move out of the country each year.

The defendants weren’t punished for holding crypto. They were punished for using it to run what amounted to an unlicensed foreign exchange operation.

What this means for investors

Bitcoin and major altcoins showed no meaningful reaction to the news. Continued crackdowns on cross-border crypto transactions could further suppress trading volumes originating from China, a market that was once the dominant force in global crypto trading.

Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.