China Faces Crypto Cache Dilemma: How Should Illicit Digital Assets be Handled?

As China takes a stricter stance on crypto-related activities, a new dilemma is brewing for policymakers and legal experts—how to handle the vast trove of seized criminal cryptocurrency assets. With enforcement operations targeting illicit online gambling, pyramid schemes, and money laundering networks, authorities have confiscated billions in Bitcoin, Ethereum, USDT, and other digital currencies. This presents a critical decision point: determining the future course of action for these crypto funds while navigating the challenges of valuation, custody, and resale in a volatile market.