In recent years, the global corporate adoption of cryptocurrencies has gained significant momentum. While companies like MicroStrategy and Tesla have made headlines for their massive Bitcoin holdings, a growing number of Asian firms — including Chinese-listed entities — are also stepping into the digital asset space. This raises a critical question: Can companies based in mainland China legally purchase Bitcoin or other cryptocurrencies?
This article explores the evolving landscape of corporate crypto investments, analyzes China’s regulatory framework, outlines potential legal risks, and provides actionable insights for businesses considering digital asset exposure.
👉 Discover how global companies are integrating crypto into their treasury strategies
Global Corporate Adoption of Cryptocurrency
Corporate investment in digital assets is no longer limited to tech startups. Established public companies are increasingly treating Bitcoin as a legitimate treasury reserve asset.
MicroStrategy stands out as the world leader, holding over 174,530 BTC — valued at approximately $9.1 billion as of February 22, 2024. Tesla follows closely, with Bitcoin holdings exceeding $500 million and a history of accepting crypto payments for its vehicles.
These strategic moves reflect a broader trend: institutional confidence in blockchain technology and digital scarcity. But it's not just U.S. firms leading the charge.
Hong Kong-Listed Chinese Firms Enter the Crypto Space
While mainland China maintains strict regulations on cryptocurrency transactions, Hong Kong-listed companies are taking advantage of the city’s more open financial environment.
In March 2024, Boya Interactive, a港股-listed gaming company, announced plans to seek shareholder approval for an additional $100 million allocation toward cryptocurrency purchases. The company had already acquired:
- 1,110 BTC at an average price of $41,790
- 14,855 ETH at $2,777
- Around 8 million USDT
As of March 8, 2024, Boya Interactive reported unrealized gains of $45.86 million (RMB 330 million). The market responded strongly — its stock surged nearly 90% over two days, with a month-to-date increase surpassing 200%.
Shortly after, Inke Universe (Yingyu), a social media platform, revealed its board approved a $100 million budget to acquire digital assets over five years through regulated exchanges, using existing cash reserves.
These developments signal growing corporate interest in digital assets within the Chinese-speaking business world — even if operations remain outside mainland jurisdiction.
👉 See how top companies manage crypto treasury allocations securely
Legal Framework: Can Mainland Chinese Companies Buy Bitcoin?
Despite increasing international adoption, the situation in mainland China remains complex due to stringent regulatory policies.
Key Regulatory Milestones
- 2013: The People’s Bank of China (PBOC) and four other agencies issued the Notice on Preventing Bitcoin Risks, declaring that Bitcoin is not legal tender but acknowledging its nature as a virtual commodity.
- 2017: Seven government bodies banned Initial Coin Offerings (ICOs) and prohibited exchanges from facilitating fiat-to-crypto trading.
2021: Ten agencies, including PBOC and the Supreme People’s Court, released the Notice on Further Preventing and Disposing of Virtual Currency Trading Speculation Risks. This landmark policy:
- Classified all virtual currency-related financial activities as illegal
- Banned exchanges from serving Chinese residents
- Prohibited banks and payment institutions from supporting crypto transactions
Legal Status of Corporate Crypto Holdings
Although individuals are generally allowed to hold cryptocurrencies at their own risk, the rules for corporations are less clear.
Under China’s Civil Code, Article 127 recognizes the protection of virtual property, which may include cryptocurrencies. Since companies are civil entities, they technically fall under “legal persons” who can own such assets.
However, purchasing or trading crypto may violate the 2021 ban on "virtual currency exchange services" and related financial activities. Even indirect involvement — such as using third-party platforms or facilitating employee payments in crypto — could trigger scrutiny.
Thus, while mere possession might not be explicitly illegal, any active transactional behavior (buying, selling, exchanging) likely constitutes a prohibited financial activity.
Legal Risks for Companies Considering Crypto Investments
1. Violation of Financial Regulations
Engaging in cryptocurrency trading may expose companies to allegations of:
- Illegal financial operations
- Unauthorized securities issuance
- Money laundering facilitation
The inclusion of judicial authorities (Supreme Court, Supreme Procuratorate, and Ministry of Public Security) in the 2021 notice underscores that violations may lead to criminal prosecution, not just administrative penalties.
2. Investment Losses Not Protected by Law
The 2021 notice clearly states:
“Civil acts involving investment in virtual currencies that violate public order and good customs are invalid. Losses incurred shall be borne by the investor.”
Courts have upheld this principle. For example, in a 2022 Shanghai case (Pan v. Huang), a court ruled that a contract for cryptocurrency investment was invalid due to violation of public policy, and both parties were required to return what they had received — though no compensation was awarded.
Judicial outcomes remain inconsistent across regions, creating uncertainty in dispute resolution.
3. Tax and Accounting Challenges
There is currently no official tax guidance on corporate crypto transactions in mainland China. However, profits from asset transfers typically incur capital gains taxes.
From an accounting perspective:
- Hong Kong-listed companies like Meitu classify Bitcoin and Ethereum as intangible assets, recording them at market value upon acquisition and recognizing impairments when prices drop.
- U.S.-listed firms such as Coinbase treat stablecoins (e.g., USDC) as financial assets, while volatile cryptos are treated similarly to intangibles.
Mainland firms lack standardized protocols, increasing audit complexity and compliance risk.
Frequently Asked Questions (FAQ)
Q: Is it illegal for a Chinese company to hold Bitcoin?
A: Holding Bitcoin itself isn’t explicitly banned, but engaging in purchases or trades likely violates prohibitions on virtual currency financial activities.
Q: Can a company buy crypto through an overseas exchange?
A: No. Using foreign platforms to conduct transactions for mainland-based entities still falls under China’s jurisdiction and is considered illegal under the 2021 notice.
Q: Are there any exceptions for blockchain or Web3 companies?
A: Not currently. Even tech-focused firms must comply with nationwide bans on crypto trading and financing activities.
Q: What happens if a company’s account is found to transact in crypto?
A: Banks may freeze accounts, regulators may impose fines, and executives could face investigations — especially if funds are linked to illicit sources.
Q: How do Hong Kong-listed firms legally buy crypto?
A: Hong Kong operates under a separate regulatory regime that permits licensed crypto trading. These companies follow local compliance frameworks, which differ from mainland rules.
Q: Could regulations change in the future?
A: While unlikely in the short term, continued innovation and global adoption may prompt policy reassessment — particularly around CBDCs and enterprise blockchain use cases.
Strategic Recommendations for Businesses
For companies exploring digital assets:
- Conduct thorough compliance reviews before any engagement.
- Isolate crypto-related activities from core business operations.
- Verify fund sources and counterparty legitimacy to avoid money laundering risks.
- Monitor Hong Kong and international markets for best practices.
- Stay updated on regulatory signals from financial and judicial authorities.
While direct participation remains high-risk in mainland China, understanding the global shift helps businesses prepare for future opportunities — especially as Web3 technologies evolve beyond speculation into real-world applications.