High-profile criminal cases in China involving massive cryptocurrency seizures have ignited concerns about the safety and future of virtual currencies. The arrest of alleged scam kingpin Chen Zhi and corruption charges against a former central bank official underscore ongoing risks. Analysts say these events may temporarily pressure bitcoin prices but won't sway long-term trends.
Two high-profile criminal cases in China have led to the seizure of enormous cryptocurrency caches, sparking questions about the safety and future of virtual money. One involves Yao Qian, the former head of the central bank’s digital currency research institute, accused of corruption. The other centers on Chen Zhi, an alleged scam centre kingpin linked to about US$15 billion in bitcoin.
The arrest of Chen Zhi, accused of crypto fraud and possibly coercing investors into scams, might push bitcoin prices down temporarily. But Sanjeev Aaron Williams, a Hong Kong-based lawyer who writes on geopolitical risk and the digital economy, said: “While Chen is accused of crypto fraud and probably some element of coercion to scam investors, that is a separate issue to bitcoin’s price drop at the start of 2026, which is now at about 30 per cent lower than its all-time high.”
Trading of crypto assets has been banned in mainland China for years. The Chinese central bank, which has doubled down on promoting the digital yuan, pledged a further crackdown on virtual money in October despite market calls for yuan stablecoins. Hong Kong, however, aims to become a global hub for crypto businesses.
Analysts said the long-term trend for assets like bitcoin depends on institutional capital, interest rate expectations and the likelihood of the United States’ Digital Asset Market Clarity Act being signed into law this year. While these cases have fueled debate, other factors will have greater sway over cryptocurrencies’ trajectory in China.
