#Crypto Security Insights  Local governments in China sell hundreds of millions of dollars in cryptocurrencies.

It has been revealed that local governments in China are actively selling cryptocurrencies seized from law enforcement operations.

According to Reuters, local governments in China have begun selling cryptocurrencies they seized to support public budgets amid the slowdown in the economy. These sales are being carried out despite the ongoing ban on cryptocurrency trading in mainland China.

Cryptocurrency trading and mining are banned in mainland China. However, local governments are working with private companies to convert cryptocurrencies seized as a result of illegal activities into cash. According to Reuters, this raises concerns such as lack of transparency and increased risk of corruption.

While the law prohibits individuals from trading cryptocurrencies, it considers the activities of companies that mediate the sale of government assets as legal. This has increased the interest of the private sector in this area. Shenzhen-based technology firm Jiafenxiang has sold 3 billion yuan (about $408 million) worth of cryptocurrencies since 2018 at the request of several cities in Jiangsu Province. The sales proceeds are first collected in US dollars and then converted into yuan through local banks.

China is the second largest Bitcoin owner after the US, with approximately 190,000 BTC. The US holds 198,012 BTC.

How cryptocurrencies are legally handled has become an important agenda item in the Chinese judiciary. In February, representatives of the Supreme People's Court and lawyers from various universities held a seminar on the subject in Beijing. In December, the People's Bank of China (PBOC) announced that it included crypto regulations in its annual financial stability report and that it was working to strengthen the regulatory framework at the international level.