China’s Communist Party Calls for Tougher Oversight of Crypto-Linked Corruption

China’s ruling Communist Party has urged authorities to intensify their fight against corruption involving virtual currencies and blockchain technology, highlighting the growing role of digital financial tools in its latest anti-corruption campaign.

The appeal was included in a decision adopted by the Party’s Central Committee on October 29 during the Fifth Plenary Session of the 20th Central Committee. China’s state news agency Xinhua released the complete document on November 1. The decision outlines the Party’s commitment to “full and rigorous Party self-governance,” emphasizing stronger discipline, accountability, and supervision of its members.

In its section on combating corruption, the document specifically identifies virtual currencies and blockchain networks as channels that could facilitate illicit financial activities. An English translation states that authorities must “resolutely crack down on corruption carried out through the internet, virtual currency, cross-border funds, blockchain and the like.”

The directive does not explicitly mention Bitcoin or announce additional restrictions on cryptocurrency trading, mining, or stablecoins.

It also calls for greater scrutiny of emerging and concealed corruption methods, including anticipated financial benefits, prearranged proxy ownership, intermediaries known as “white gloves,” and the revolving door between government positions and private-sector businesses.

China Continues Its Strict Cryptocurrency Crackdown

The latest directive builds on China’s long history of restrictions against the cryptocurrency sector, which began more than a decade ago.

In December 2013, the People’s Bank of China (PBOC) and other regulatory bodies prohibited financial institutions from processing Bitcoin transactions. Authorities expanded the restrictions in September 2017 by banning initial coin offerings (ICOs) and cryptocurrency exchanges serving mainland Chinese users.

The government adopted an even tougher position in September 2021, when the central bank and multiple agencies declared all cryptocurrency transactions illegal. The authorities also intensified their campaign against crypto mining operations.

More recently, a central bank-led notice issued on February 6 reaffirmed that virtual currency-related business activities within mainland China constitute illegal financial operations.

The announcement also restricted offshore stablecoins pegged to the Chinese yuan and unauthorized tokenization of real-world assets, according to CryptoSlate’s summary of the notice.

The latest decision indicates that Beijing remains concerned about cryptocurrencies and blockchain networks being exploited to conceal illicit funds, facilitate cross-border transfers, and disguise corruption. However, it does not introduce a new blanket prohibition on specific digital assets.

Instead, China’s Communist Party is incorporating virtual currencies and blockchain into its broader anti-corruption strategy, potentially increasing scrutiny of financial misconduct involving these technologies.