VPN Usage for Crypto Access in China: Legal Risks in 2025

Using a VPN to access cryptocurrency exchanges in China isn’t just risky-it’s a high-stakes game with real consequences. By 2025, China has shut down nearly every path to private crypto trading. Binance, Coinbase, Kraken-all blocked. Bitcoin and Ethereum? Not legal tender. Even holding crypto can land you in trouble. And if you’re using a VPN to bypass the Great Firewall to trade or invest? You’re stacking legal risks on top of each other-and the government is watching.

China’s Crypto Ban Is Total

It’s not a gray area anymore. As of June 1, 2025, China made all cryptocurrency activities illegal. That means no trading, no mining, no staking, no peer-to-peer exchanges, and no using crypto to pay for goods or services. The People’s Bank of China, the National Administration of Financial Regulation, and the Ministry of Public Security are all enforcing this. Banks are required to freeze accounts linked to crypto transactions. Payment apps like WeChat Pay and Alipay now scan for crypto-related activity and shut down users automatically.

Even if you’re just holding Bitcoin in a wallet, authorities can seize it. Courts don’t recognize crypto as property for ownership purposes-but they do treat profits from trading as illegal gains. That means if you bought Bitcoin in 2023 and sold it in 2025, the profit is confiscated. No trial needed. No appeal. Just a bank freeze, a phone call from the police, and your crypto vanishes.

VPNs Are Targeted, Not Just Blocked

Most people think a VPN is just a tool to unblock websites. In China, it’s a red flag. The government doesn’t just block VPN servers-it hunts them. The Great Firewall uses AI to detect encrypted traffic patterns that match known VPN protocols. If your phone or laptop suddenly loses internet for 15 minutes, then comes back after you restart it, that’s not a glitch. That’s the firewall resetting your connection because it flagged your traffic.

Only a handful of VPN providers still work reliably in China, and even those are unreliable. One day, you can access Binance. The next, the server is down. Some apps disappear from the App Store overnight. Others get flagged as “malicious software” and trigger automatic phone scans. Police in cities like Shanghai and Shenzhen have been known to confiscate phones from suspected users, delete the VPN apps, and return the device only after the user signs a statement promising not to use it again.

And here’s the catch: using a VPN isn’t technically illegal under national law-but combining it with crypto access turns it into a violation. Authorities don’t need to prove you’re trading crypto. Just having a VPN installed and accessing a blocked site is enough to trigger an investigation.

Who Gets Targeted?

It’s not just traders. Foreigners on tourist visas have been pulled aside at airports for using a VPN with crypto apps open on their phones. Chinese citizens with overseas bank accounts have had their accounts frozen after crypto-related transactions were flagged. Even students using a VPN to access educational content about blockchain have been questioned by campus security.

Enforcement isn’t random. It’s focused. If you’re sending money overseas to buy crypto, you’re on a watchlist. If you’re using a Chinese bank account to fund a crypto purchase through a VPN, you’re flagged. If you’re part of a group chat discussing crypto strategies on WeChat, your messages are scanned. The Cyberspace Administration of China and the State Administration of Foreign Exchange monitor cross-border flows like hawks.

There’s no public list of arrests-but unofficial reports from lawyers in Guangdong and Zhejiang confirm multiple cases of administrative detention. People are held for 24 to 72 hours, forced to delete apps, sign confessions, and pay fines. In extreme cases, where authorities suspect money laundering or large-scale trading, criminal charges for “illegal fundraising” or “financial fraud” are filed. Those can mean years in prison.

The Digital Yuan Is the Real Goal

China isn’t banning crypto to stop innovation. It’s banning it to control it. The digital yuan (e-CNY) is expanding fast. By 2025, it’s used in over 200 cities for retail payments, public transport, and government salaries. It’s not decentralized. It’s not anonymous. Every transaction is tracked by the central bank. You can’t buy crypto with it. You can’t send it overseas. But you can pay your rent, buy groceries, and even tip street vendors-all with full government oversight.

That’s the trade-off. The government gives you convenience, speed, and stability. In return, you give up privacy and freedom. And they’re making it clear: if you want digital money, use ours. Anything else is a threat to financial control.

Stablecoins? Even Riskier

Some users think stablecoins like USDT or USDC are safer because they’re tied to the dollar. They’re wrong. China treats stablecoins worse than Bitcoin. Why? Because they’re used to move money out of the country. The State Administration of Foreign Exchange considers stablecoin transfers as illegal capital flight. If you use a VPN to buy USDT on Binance and then send it to an overseas wallet, you’re not just breaking crypto rules-you’re violating foreign exchange laws.

There’s no legal way to convert yuan to stablecoins in China. Any attempt triggers automatic alerts to banks and regulators. Even if you use a friend’s overseas account to receive the stablecoins, authorities can trace the chain back to your phone number, IP address, or bank transfer.

What Happens If You Get Caught?

Here’s what you’re risking:

• Account freezes: Your Chinese bank account, Alipay, or WeChat Pay can be locked without warning.
• Phone confiscation: Police can take your phone, delete apps, and demand you sign a statement.
• Fines: Up to 50,000 RMB ($7,000 USD) for first-time offenders.
• Criminal charges: If authorities believe you’re trading at scale, you could face charges for “illegal fundraising” or “money laundering.”
• Crypto seizure: Any digital assets in your wallets are confiscated-no court order needed.

There’s no appeals process. No public trials. No transparency. The system is designed to scare people into compliance, not to punish them fairly.

Is There Any Safe Way?

No.

Not for Chinese citizens. Not for foreigners living in China. Not even for tourists with short-term visas. The government doesn’t make exceptions. Even if you think you’re being careful-using a “reliable” VPN, trading small amounts, keeping your wallet offline-it doesn’t matter. The system doesn’t care about your intent. It only cares about the activity.

Some try to use offshore exchanges with KYC requirements, thinking that proves they’re legit. But if you’re accessing those sites from within China using a VPN, you’re still violating the rules. The exchange doesn’t protect you. The bank doesn’t protect you. The VPN doesn’t protect you.

The Future Won’t Get Easier

China is investing billions into AI-powered surveillance tools that can detect crypto transactions even through encrypted networks. New software can identify blockchain addresses linked to Chinese IP addresses. Facial recognition is being tied to wallet activity in pilot zones. By 2026, it’s likely that using a VPN to access crypto will trigger an automated alert to local police.

There’s no sign of policy reversal. The digital yuan is the future. Private crypto is the past. And anyone trying to bridge the two is playing with fire.

What Should You Do?

If you’re in China and you’re using a VPN for crypto-stop. Delete the apps. Close the accounts. Move on.

If you’re outside China and thinking of helping someone inside access crypto through a VPN-don’t. You’re not helping. You’re putting them at risk.

If you’re a foreigner visiting China-leave your crypto apps off your phone. Don’t open them. Don’t even think about it. The risk isn’t worth the reward.

The truth is simple: in China today, crypto access isn’t a technical problem. It’s a legal one. And the law is not on your side.