1. What the law actually says
1.1 2021 blanket ban on crypto business
- The PBOC’s 24 Sept 2021 circular classifies any service that “exchanges legal tender and virtual currency” (including offshore exchanges serving Chinese users) as illegal financial activity.
- Reuters and Bloomberg reported that the notice amounted to a nationwide ban on all crypto transactions and mining.
1.2 Ownership vs. trading
- Several mainland courts, most recently the Shanghai No. 2 Intermediate People’s Court, have ruled that Bitcoin counts as virtual property protected by civil law, meaning you may legally hold or inherit it.
- That recognition does not legalise trading platforms; it simply means a private wallet balance can be defended in court if stolen.
2. Can you open an account and buy with CNY?
| Channel | Status in Shanghai / mainland | Why |
| Domestic exchanges | Shut down since 2017; licenses impossible | Explicitly banned under 2021 notice |
| International exchanges | Must geo‑block mainland IPs; payment rails disabled | Providing service counted as illegal “overseas” activity |
| Bank transfers / Alipay / WeChat Pay | Blocked; keywords trigger freezes | Banks obliged to monitor and report crypto keywords |
| Bitcoin ATMs | None operate legally | Requires a money‑services license, impossible to obtain |
3. How people still get Bitcoin (and the pitfalls)
- OTC desks & P2P platforms
- Underground traders match buyers and sellers via Telegram/WeChat, settle in cash or USDT. Chainalysis estimates mainland OTC volume at US $86 billion (Jul 2022 – Jun 2023).
- Risk: counterfeit receipts, account seizures, entrapment operations.
- Overseas exchanges + VPN
- Exchanges such as Bybit publicly admit many mainlanders open accounts through VPNs, fund in USDT or HKD cards—but not CNY.
- Breaches foreign‑exchange rules; large sums can trigger money‑laundering probes.
- Physical trips to Hong Kong
- Hong Kong now licenses spot‑Bitcoin exchanges, yet regulators force them to block mainland customers. Travellers can buy only if they prove non‑mainland residency.
4. What happens if you get caught?
- Administrative penalties – banks may close accounts or report suspicious payments.
- Criminal exposure – updated anti‑money‑laundering rules list crypto alongside cash, so large peer‑to‑peer trades can be prosecuted under illegal‑business or laundering statutes.
- High‑profile crackdowns: nationwide “cat‑and‑mouse” arrests target OTC brokers; the Wall Street Journal describes police tracing yuan‑to‑crypto funnels even across borders.
5. Practical tips (not legal advice)
- Assume every CNY on‑ramp is illicit. If you value legal safety, don’t use them.
- If you already hold BTC, store it off‑exchange in self‑custody to reduce seizure risk.
- Cross‑border diversification (Hong Kong, Singapore, Dubai, etc.) provides lawful venues, but heed each jurisdiction’s KYC obligations.
- Stay below reporting thresholds & keep clear records if you must transact; courts can treat honest personal ownership leniently, but opaque flows invite trouble.
6. Key takeaways
- Yes, you can technically buy Bitcoin from Shanghai—but only through grey‑market work‑arounds.
- All compliant Chinese financial institutions are barred from facilitating those purchases, so every method involves regulatory risk.
- Personal holding is lawful; commercial intermediation is not.
- Enforcement keeps tightening, so the gap between possible and permissible is widening each year.
Move forward wisely, stay informed, and keep your entrepreneurial spirit adventurous but within the bounds of the law! 💪🚀