Is it legal for Chinese citizens to go abroad to participate in Virtual Money Mining?

The Chinese ban does not prohibit offshore Mining.

Authored by: Iris, Xu Xiaohui

When it comes to Web3 Mining, I wonder if any of you have the same confusion as Mr. Mankun: Can Chinese still participate?

First of all, it can be affirmed that Chinese individuals currently cannot participate in the domestic Mining industry.

As early as September 2021, the “Notice of the National Development and Reform Commission and other departments on the rectification of virtual currency ‘Mining’ activities” issued by our country explicitly prohibits the development of virtual currency ‘Mining’ in any form. Since then, there has been a wave of miners going abroad in China, and a large number of mining farms have been relocated to countries and regions such as Australia and Europe.

So, does going abroad mean worry-free?

Obviously, it is also unlikely.

In 2022, regulatory agencies in countries/regions including Russia and the European Union have also begun to call for and take action to ban energy-intensive cryptocurrency Mining models, with BTC Mining being the first target. Just recently, on March 5, 2025, the Chinese Embassy in Angola shared an article titled 'Reminder: Comply with laws and regulations, do not engage in virtual currency ‘Mining’.

* Image Source: Announcement from the Chinese Embassy in Angola

The document pointed out that in April 2024, Angola issued a ban on Mining policy and began a special operation to combat domestic cryptocurrency Mining activities. In this operation, the Angolan side has cracked down on multiple cases of Chinese citizens participating in virtual currency Mining. In addition, a previous announcement issued by the embassy stated that virtual currency Mining is a criminal act, and anyone involved in Mining, providing power for Mining, or even storing related equipment, once caught, will face imprisonment ranging from 1 to 12 years.

Here, it should be mentioned that in 2024, Russia has already started to support BTC Mining, while other countries like Thailand have always been able to mine legally.

So, can Chinese people legally mine in those countries and regions that support virtual currency Mining when they go abroad?

And this is also the core issue that Lawyer Mankun wants to share with everyone in this article.

The ban in China does not prohibit offshore Mining

First, we carefully read the contents of the “Notice of the National Development and Reform Commission and other departments on the rectification of ‘Mining’ activities of virtual currencies”, which mainly involves the following points:

• Comprehensive review and inspection of virtual currency Mining projects, including those that have been completed, are under construction, and abnormal power consumption monitoring;
• No new project investment and construction are allowed, and various measures are taken to completely eliminate the possibility of new Mining projects;
• Accelerate the orderly exit of existing projects, steadily rectify and clear out virtual currency Mining projects that are in operation.

It can be found that the ban itself is only aimed at domestic virtual currency Mining activities and does not restrict the overseas approach of virtual currency Mining. So, from the ban itself, there is no problem for Chinese citizens to set up mines overseas or participate in overseas mines for virtual currency Mining.

** Image Source: ‘Popular Science on the Illegal Nature of Virtual Currency Mining Behavior’ released by the Guangdong Provincial Development and Reform Commission *

However, it is important to note that as virtual currency Mining activities have been included in the ‘Guiding Catalogue for the Adjustment of Industrial Structure’ (2019 version) for elimination, they fall under the category of ‘outdated production technology and equipment.’ Therefore, even if not engaging in Mining activities, production and sale of related equipment/products/technologies still violate Article 50 of the ‘Law of the People’s Republic of China on Promotion of Circular Economy (2018 Amendment ),’ and will face severe penalties. This is also one of the key reasons why domestic mining machine manufacturers are actively expanding overseas.

Besides, the mined coins also need to be sold. The ‘Notice on Further Preventing and Dealing with the Risks of Virtual Currency Trading Speculation’ issued by China in 2021 strictly prohibits overseas virtual currency exchanges from providing virtual currency trading services to Chinese citizens. Although there are still many ways to bypass IP restrictions for virtual currency trading, if any issues arise, such as frozen accounts due to illicit funds or being scammed in OTC transactions, users can only bear the risks themselves, as Chinese law does not support rights protection.

If you feel that you can bear all these risks and are determined to go into Mining, then the key question is: Can Chinese citizens really enter legally in those countries and regions where Mining is allowed?

Can Chinese participate in overseas Mining legally?

Currently, in overseas jurisdictions that are legal or explicitly supportive and belong to popular Mining sites, such as Russia and Thailand. Here, lawyer Man Kun will take these two countries as examples to sort out the regulatory framework for virtual currency Mining they have issued, whether it can allow Chinese people to participate legally as well?

Russia

In November 2024, Russia formally passed Bill No. 237585-8, clarifying the legal framework for Mining of virtual currencies. The prerequisite for legal participation in virtual currency Mining is: entities registered in Russia as legal entities or individual entrepreneurs must submit the ‘Registration Form for Virtual Currency Mining Activities’ to the Ministry of Digital Development, Communications and Mass Media of Russia, and apply to the Ministry of Energy for approval before being allowed to connect to the designated power grid. Alternatively, individuals can also participate in Mining activities, but only on a small scale within the government-set limit on power consumption (not exceeding 6000 kilowatt-hours per month).

The bill does not specify whether the target is limited to Russian citizens or can include foreign citizens. Therefore, in theory, Chinese people can also go to Russia to legally participate in virtual currency Mining. However, it should be noted that generally, those who choose to mine overseas usually have a certain scale of mining machine clusters or mining farms. Therefore, it is recommended to first register as a legal entity or individual merchant in Russia according to the requirements, and then participate in virtual currency Mining activities in compliance with regulatory regulations.

Currently, Russian law allows foreigners to register legal entities or individual entrepreneurs locally, but certain conditions need to be met. For example, when applying for an individual entrepreneur as an individual, one must have long-term residence or a residence permit in Russia; if choosing to establish a limited liability company (LLC) with full ownership in Russia, or joint venture with local residents/businesses, a registered address within Russia must be provided, and at least one Russian executive (such as a director or general manager) must be appointed.

Thailand

Thailand’s “Digital Asset Act 2022” defines cryptocurrency Mining as “digital asset services,” which can be applied for by enterprises or individuals. The law requires a license to be obtained from the Securities and Exchange Commission (SEC) of Thailand before engaging in virtual currency Mining activities. Additionally, starting from 2025, enterprises engaged in virtual currency Mining activities are required to use at least 50% renewable energy sources.

Similarly, the nationality restrictions of the target individuals are not specified in the bill, so Chinese people can also legally participate in Mining activities in Thailand. Therefore, theoretically, the compliance items we need to consider include:

• If registered as a company, the registered capital needs to reach 100 million baht (about 20 million RMB), and pass the anti-money laundering review. At the same time, the application for a company needs to rely on a local partner, and the foreign investment holding limit is usually 49%.
• If participating as an individual, ensure that the equipment power is ≤10 kilowatts, and the equipment information has been reported to the Ministry of Energy.
• In addition, Mining income needs to be exchanged for fiat currency through compliant exchanges, otherwise there may be money laundering risks.

Summary of Lawyer Mankun

Can Chinese people legally Mining overseas? I’m sure everyone has a rough idea after reading this article.

However, Mr. Mankiw needs to remind everyone that policies are not set in stone. Take Russia for example, despite opening up virtual currency Mining in the second half of 2024, a law passed on December 23, 2024 announced that 10 regions in Russia will completely ban Mining from January 2025 to March 2031, while 3 other regions will impose partial restrictions on Mining during each heating season before 2031.

Therefore, even if you go abroad to countries and regions where virtual currency Mining is legal, you still need to clearly comply with local laws and regulations, and be sensitive to policy dynamics, and never hold a lucky mentality.

Furthermore, as mentioned by lawyer Mankiw in the previous section, the trading of virtual currencies is not yet protected by Chinese law. At the same time, even if cashed out overseas and funds flow back to China, it will involve a series of regulatory issues including taxation, foreign exchange, etc. Therefore, Chinese citizens should also consider these factors as part of the comprehensive consideration of whether to participate in Mining.

In short, as the saying goes: There are risks in the Web3 market, so investment needs to be cautious.