September 19, 2025
By Anjali Kochhar
A district-level court in Shanghai has sold more than 90,000 Filecoin tokens, which had been seized in criminal cases, using a licensed cryptocurrency platform in Hong Kong. The sale was conducted in partnership with a third-party institution, according to a statement from the Supreme People’s Court in Shanghai.
Under the arrangement, proceeds from the sale were transferred into a court-controlled bank account. Depending on legal rulings, funds will either go to the national treasury or be refunded to victims of the related crimes.
This action represents one of the earliest instances of a mainland Chinese court using an overseas crypto platform to reprice and dispose of seized blockchain assets. The tokens sold, Filecoin, are a blockchain-based storage currency used for decentralised data management.
The move comes amid intensifying debates in China about the role of digital assets, stablecoins, and possible regulation. While Beijing has been developing its own central bank digital currency (CBDC), the e-CNY, it has simultaneously imposed strict bans on many cryptocurrency-related activities. Centralised trading and Bitcoin mining remain heavily restricted on the mainland.
In recent months, market participants and academics have increased calls for clearer regulation and for mainland China to consider following Hong Kong’s approach in some areas. Hong Kong recently introduced its first stablecoin ordinance, which came into effect on August 1. Some see this as a potential model for promoting offshore yuan adoption and integrating digital finance more broadly.
Handling seized crypto assets in criminal or civil cases poses new challenges for China’s judiciary. Issues include how to value volatile crypto assets, how to choose platforms for liquidation, and how to ensure proceeds are properly managed and distributed. The Shanghai court’s use of a Hong Kong-licensed platform illustrates one legal mechanism for managing these risks.
Legal experts say the case could set precedents for how mainland courts handle future cryptocurrency seizures. As digital asset issues grow more complex, clearer legal frameworks are likely to be called for, especially regarding stablecoins, offshore platforms, cross-border finance, and victims’ restitution.
The case in Shanghai is more than a legal formality. It signals that even in a restrictive crypto policy environment, Chinese authorities are exploring practical approaches to managing blockchain assets. With the intersection of criminal justice, financial regulation, and digital innovation, China’s next steps could shape both domestic and regional norms in crypto governance.
About the author
Anjali Kochhar covers cryptocurrency and blockchain stories in India as well as globally. Having been in the field of media and journalism for over four years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.
