When we talk about "thirteen departments cracking down on cryptocurrency speculation," what are we really discussing?

Original author: Xiao Sa Legal Team

Original source: Xiao Sa, lawyer

On November 28, 2025, the People's Bank of China, together with more than ten other departments, convened a coordination meeting on combating virtual currency trading and speculation (hereinafter referred to as the 1128 Meeting). The meeting emphasized the need to continue adhering to the relevant provisions of the 2021 "Notice on Further Preventing and Handling Risks of Virtual Currency Trading and Speculation" (hereinafter referred to as the 9.24 Notice) , and to adopt a prohibitive policy on the commercial operation of virtual currencies in mainland China. The meeting also stressed the need to crack down on money laundering and illegal outflow of funds using virtual currencies .

Overall, the November 28th meeting was essentially a rehash of old arguments. Even the most zealous cryptocurrency media outlets could only manage to dig out a single sentence from the otherwise lackluster news feed: "Stablecoins are also a type of virtual currency." This raises serious questions: Back in the September 24th, 2021 notice, the People's Bank of China explicitly stated that Tether (USDT) is a type of virtual currency. While the term "stablecoin" wasn't used, market participants never disputed or misunderstood the claim that "stablecoin-related businesses cannot be operated in mainland China."

So, what exactly was the focus of the 1128 meeting? What real impact will it have on the industry? Today, the Sa Jie team will briefly discuss this with our partners.

I. What were the key points of the 1128 meeting?

Let me start with a strange phenomenon. When the September 24, 2021 announcement was first released, Bitcoin (BTC), the "leader" of cryptocurrencies, immediately plummeted, causing widespread panic in the crypto world. While exchanges were simultaneously consulting with lawyers and arranging emergency overseas expansion, the November 28 meeting did virtually nothing for BTC, demonstrating its limited impact…

The 1128 meeting did not receive enough attention for two reasons: firstly, it offered little new information, and secondly, it released little information and its focus was rather vague, making it difficult for those who are not long-term practitioners in the industry to grasp the true purpose of the meeting .

The Sa Jie team believes that the 1128 meeting had two key points: (1) the judicial rulings have “reverted” ; and (2) the illegal use of stablecoins for currency exchange has been strictly restricted.

(I) A "correction" in the trend of judicial rulings

As analyzed in previous articles by the Sa Jie team, with the expansion of the virtual currency market, related transactions are increasing, and various civil disputes are frequently occurring. More and more people are taking legal action in court to seek judicial relief for civil disputes related to virtual currencies.

Against this backdrop of change, Chinese courts have gradually gone through two stages:

(1) In 2021-2022, during the early stages of the implementation of the 9.24 Notice, Chinese courts uniformly ruled all currency-related legal acts invalid (including currency-related exchanges, transactions, custody, and investments, as well as peripheral legal acts related to currency, such as mining machine sales and custody contracts), requiring all parties to the contract to bear their own risks and not supporting the return of contract payments.

(2) From 2023 to present. With the increase in relevant judicial practice, Chinese courts have gained a deeper understanding of virtual currencies, and many scholars and judicial practitioners have begun to question and criticize the previous "one-size-fits-all" approach. The main reason is that with the abandonment of PoW technology by many mainstream public chains, virtual currency mining is no longer as energy-intensive and environmentally polluting as it used to be, and the so-called "violation of public order and good morals" argument in the explanation of the law in many judgments has been shaken. As a result, some courts have gradually formed an unwritten rule of adjudication when handling disputes involving cryptocurrencies: they continue to confirm the invalidity of contracts, but no longer require all parties to bear the risks themselves. Especially for some contracts using fiat currency for transactions, judges may order the return of a certain percentage of the fiat currency already paid. At the same time, the courts will also actively promote pre-trial and in-trial settlements between the parties in such cases, rather than directly issuing judgments.

The Sa Jie team believes that one of the important purposes of this meeting was to adjust the direction of this judicial ruling.

First, a week before the meeting, Sa Jie's team received a call from a judge in a recently concluded appeal case involving a cryptocurrency investment dispute (the case was won, and the Henan Provincial Higher People's Court rejected the appeal). The judge informed them that the Supreme People's Court was paying close attention to such cases and was conducting research . Subsequently, the judge had in-depth discussions with us about the details of the case and listened to our opinions.

Secondly, at the end of November, the Supreme People's Court released its 36th batch of guiding cases concerning judicial review of arbitration, comprising six cases. Among them, Guiding Case No. 199, Gao Zheyu v. Shenzhen Yun Silk Road Innovation Development Fund Enterprise and Li Bin, was republished (this is actually an old case, having already been made public in 2022). Those familiar with my country's judicial system have heard the saying: "A thousand rulings are hard to overturn." Given the special form and legal status of arbitration, courts generally respect arbitral awards, and unless a very limited number of circumstances warrant their revocation, courts generally recognize them.

Thus, the focus of the meeting can be glimpsed from a small part.

(ii) Strictly restrict illegal foreign exchange transactions using stablecoins.

This is actually a real problem that regulatory agencies must face. As we all know, my country has a relatively strict foreign exchange control system, and under normal circumstances, each person can only exchange no more than US$50,000 in foreign currency per year.

Previously, people with large outbound capital needs (for example, those whose children's overseas education costs are huge) had to ask their extended family and friends to help them raise "quotas." Now, with the stablecoin market gradually expanding, application scenarios constantly broadening, and the number of cryptocurrency merchants increasing significantly, many outbound capital needs have been met by stablecoins such as USDT and USDC.

Even worse, stablecoins can be used to facilitate money laundering or conceal the proceeds of crime for upstream criminals. Furthermore, in judicial practice, our team has also seen daring foreign trade merchants use USDT and USDC to circumvent UN sanctions resolutions and assist sanctioned countries in their foreign trade.

Therefore, what the 1128 meeting really wanted to regulate was this kind of behavior that seriously disrupted the financial order and crossed the red line .

From a judicial practice perspective, in the past year or two, the Sa Jie team has clearly felt that the Chinese judicial authorities are gradually increasing their regulation of cryptocurrency dealers, with a large number of dealers being convicted and punished for crimes such as illegal business operations, aiding and abetting fraud, money laundering, and concealing the proceeds of crime . Therefore, anyone interested in engaging in related amateur activities should exercise extreme caution.

II. The Impact of the November 28th Conference on the Industry

From the perspective of cryptocurrency prices, the November 28th meeting had no impact on the crypto market. However, this is not the case. During their routine industry research, members of the Sa Jie team noticed that, according to third-party statistics, the computing power contributed by China to major public blockchains is increasing significantly, recovering to the levels before the September 24th, 2021 notice. Related practitioners are also showing a trend of returning to the mainland , and some "mining farms" in remote mountainous areas are starting full-scale operations.

This situation is caused by a combination of factors. Firstly, as Singapore and Hong Kong have tightened restrictions on virtual asset businesses, and related regulations have been successively introduced, the cost of licensed operation has increased significantly, forcing many practitioners to seek alternatives. Secondly, China has achieved considerable results in its governance since the issuance of the "September 24th Notice," and in recent years, there has been a certain degree of "laxity" and leniency in regulating the mining and virtual asset-related industries, leading some practitioners to believe that "the storm has passed"...

The November 28th meeting was essentially sending a signal: China's regulatory policies remain unchanged, and people should not take chances and cross the line.

However, will the November 28th meeting affect Hong Kong's open policy towards virtual assets? The Sa Jie team believes not. Hong Kong and mainland China have gradually formed a basic framework of one open and one restrictive approach to virtual assets. The regulatory attitude is clear: it's not that we won't allow financial innovation, but you must innovate in the areas we designate . Therefore, partners who are launching RWA projects or pursuing stablecoins in Hong Kong can proceed with confidence.

In conclusion

The Sa Jie team believes that partners don't need to be overly nervous about the November 28th meeting. While it's true that there's a need to reiterate regulatory policies and clarify regulatory norms since the implementation of the regulations on September 24th, this absolutely does not mean that alarmist claims such as "China's policy towards virtual assets has shifted" or "the central bank will severely crack down on virtual currencies" are true. Partners should not believe or spread rumors, and should simply conduct business in compliance with regulations .