Written by: Xiao Sa Legal Team
Time has entered February 2026, and the global cryptocurrency market has experienced consecutive days of “collapse-style” crashes. Even Bitcoin (BTC), known as “virtual gold,” has fallen below the $70,000 mark after continuous sharp declines. Based on the timeline of this article, since reaching its peak last October, BTC has plummeted by over half. However, short-term cold spells will eventually pass, and the trend of the crypto asset market continuing to exist and grow will not change.
Today, Sister Sa’s team will share insights based on the latest frontline case handling experience regarding the policy trends in China Mainland for mining, holding, and trading cryptocurrencies in 2026, for partners’ reference and discussion.
- What is the overall judicial policy trend in 2025?
In articles from 2025, Sister Sa’s team previously shared that there has been a positive policy shift in how Chinese judicial authorities handle disputes related to crypto assets:
(1) Moving away from outright invalidation of contracts, instead reviewing them based on fixed key time points;
(2) Even if contracts are deemed invalid, courts no longer automatically assign risk to all parties. Instead, they consider whether legal currency was used as the transaction consideration—such as transactions in legal currency (mainly RMB)—which may lead to requiring the recipient to return a certain proportion of the contract amount (see the recent publicly disclosed case of Tong vs. Qian mining machine escrow dispute at Shenzhen Intermediate People’s Court).
However, it is important to note that if contracts are directly traded using cryptocurrencies, Chinese judicial authorities are likely to still directly invalidate such contracts, with losses borne by the parties (see Supreme People’s Court case database case: (2021) Jing 0101 Minchu 6309, registration number: 2023-11-2-119-001).
In summary, regarding “mining” disputes, by the end of 2025, Chinese courts have clarified several key points in practice:
First, on the validity of “mining” contracts. Contracts signed after September 3, 2021, should be deemed invalid; those before this date should not be simply invalidated but evaluated based on the Civil Code’s provisions on contract validity and the facts of the case.
Second, on handling contracts deemed invalid. The treatment depends on whether legal currency was used: if legal currency was used, courts will comprehensively assess the fault of both parties and order proportionate refunds; if cryptocurrencies like BTC, ETH, USDT were used, courts are likely to rule that each party bears their own losses.
Finally, regarding the effect of parties re-signing contracts after non-performance, the key is whether the parties negotiated on equal footing and reached a clear agreement on the discounted amount for crypto asset settlement: in principle, without mutual agreement, a party claiming to convert Bitcoin or other virtual currencies into legal currency for compensation will not be supported by courts; if both parties negotiate and sign a settlement agreement specifying the discounted amount, and one party breaches, courts can provide judicial relief based on the subsequent settlement agreement.
- Has the judicial policy changed in 2026?
From late 2025 to early 2026, China’s legislative and judicial authorities have issued a series of signals regarding crypto assets, summarized as follows:
Sister Sa’s team believes that these signals indicate that China is still in a cautious observation stage regarding crypto assets: while several red lines are defined, individual holdings and uses of crypto assets for non-commercial purposes are not restricted, but investigations into organizations involved in illegal activities like underground banks using crypto are becoming stricter. Details are as follows:
(1) Regarding “mining” activities
Since 2021, Chinese judicial and administrative law enforcement agencies have conducted multiple crackdowns on “mining” activities. Many “mining farms” have relocated out of Mainland China since 2021. Based on practical experience with clients, the main mining operations are now mainly in the Middle East, North America, and Africa, with a decreasing number in Mainland China.
Current measures show no significant policy change regarding “mining” activities. Once verified by law enforcement, mining companies and responsible individuals face administrative penalties, potential major property losses, but relatively low criminal risk (excluding entities involved in OTC trading and other non-“pure mining” activities).
Judicial practice across regions continues to follow the key review points established since 2025, with little change.
(2) Regarding individual holdings of cryptocurrencies
Sister Sa’s team reiterates that Chinese laws and regulations do not prohibit individuals from holding cryptocurrencies.
Although multiple regulatory documents and notices emphasize risks and scams associated with crypto trading, this does not mean that individual “holding” of crypto assets constitutes administrative illegal acts or crimes.
During case handling, the team found many people still have unclear understanding of relevant laws, with some cases where husbands, suspected of other administrative violations, were detained and falsely claimed to have been penalized for holding or trading cryptocurrencies.
As of now, China has not issued new laws or regulations to change this situation. Partners should rely on official information, verify its authenticity, and make decisions accordingly.
(3) Regarding individual trading activities
Due to the diversified nature of “trading” behaviors, this area carries the most complex legal risks in Mainland China. Current judicial trends show that trading contracts pose significant red line risks. Based on our case experience, trading contracts can be viewed in two ways:
For service providers (individuals, companies, or teams) offering contract trading, some local courts have previously classified such activities as “casino operations,” “illegal fundraising,” or “fund-raising fraud.” A few cases have been investigated under “illegal business operations,” but publicly available cases are limited.
For individuals simply participating in contract trading, the likelihood of criminal charges is low, but some cases have involved local police investigating under charges like “illegally obtaining computer information system data” or “illegally controlling computer information systems.”
Conclusion
In short, in 2026, Chinese judicial and law enforcement agencies have not significantly changed their policies regarding individual mining, holding, and trading in Mainland China. Civil cases even show signs of positive change.
However, it must be emphasized that behaviors such as using USDT and other stablecoins to covertly transfer funds abroad, launder money, conceal criminal proceeds, or exchange currency are very clear red lines. Crossing these lines will inevitably lead to criminal risks.
Additionally, Sister Sa’s team has observed an increasing number of cases involving the use of stablecoins like USDT to facilitate smuggling of ordinary goods and tax evasion. Given China’s strict crackdown on tax-related crimes this year, such behaviors are also clearly red lines that partners should avoid.
That concludes today’s sharing. Thank you for reading.
