- Buy Crypto
- Markets
Futures- Spot
- Copy Trade
Earn- More
Exchange Owners Share a Drink, Settling a $1 Billion Crypto Feud - Coin Circle Rule
On April 5, 2025, in the night scene of Victoria Harbour, the "BUIDL 2025" Web3 Industry Summit was underway. Amidst the clinking of glasses, a group photo quickly went viral: Huobi founder Li Lin, Binance founder CZ, and TRON founder Justin Sun were at the center stage, raising their glasses in celebration, with bright smiles, surrounded by other cryptocurrency industry tycoons.
Another more eye-catching photo circulating at the conference was of Justin Sun and Li Lin embracing and toasting. Just two months ago, Sun publicly criticized Li Lin for concealing a financial loophole in Huobi. The two were in a tense standoff, seemingly unwilling to back down. Could it be that merely two months had passed, and they had set aside their past differences?
These two photos seemed to encapsulate a glimpse of the "Golden Age" of the crypto industry—full of undercurrents of enmity as well as a symbiotic scene of intertwined interests. Their appearance together not only reflected the subtle dynamics of personal relationships but also bore witness to the crypto industry's transformation from grassroots to regulatory compliance. Now, let's take a look at the love-hate relationships among industry titans.
Li Lin and Justin Sun: Unable to Sever Debts and Complicated Relations
Li Lin and Justin Sun had a major dispute over the Huobi acquisition, widely known within the industry. The origins of the issue can be traced back to October 8, 2022, when Huobi founder Li Lin sold his shares to the Hong Kong-based Hundred Realms Capital affiliated with Justin Sun. Three years after the completion of the transaction, in February 2025, Justin Sun suddenly accused Li Lin of withholding due diligence materials, claiming there was a $30 million "financial loophole" within Huobi that he had to personally cover.
In response, Li Lin published a lengthy article stating that at the time of the 2022 transaction, there were disagreements between the parties on how to calculate user assets, and there was an adequate reserve fund set aside. The alleged "$30 million financial loophole" mentioned by Justin Sun was actually a result of liquidation losses from the exchange's margin trading during extreme market conditions. The issue had already been addressed using company revenue and should not be deemed an undisclosed "financial loophole."
In reality, this was not the first confrontation between the two, as Sun and Li's feud began shortly after the Huobi sale.
In May 2023, Justin Sun accused Li Lin's brother, Li Wei, of illicitly acquiring and selling a large amount of zero-cost HT through improper means and expressed the intention to retrieve and destroy these tokens to protect the HT community's interests. Subsequently, Huobi founder Li Lin responded in his circle of friends, stating that he hoped for evidence from Sun and that if it was confirmed that Li Wei had obtained zero-cost HT through illegal means, he was willing to compensate Huobi Company ten times the HT amount in his personal capacity. If the allegations were false, he hoped Huobi would return the users' legitimate assets.
Sun Yuchen did not provide concrete evidence in the follow-up, and the accusatory tweet was also deleted. Although it raised widespread community doubts about Huobi's internal management, ultimately this disclosure came to nothing. However, the love-hate relationship between Li Lin and Sun Yuchen did not end there. In February 2025, due to a $30 million "financial loophole," the two cryptocurrency bigwigs once again engaged in a public opinion war on the internet.
Furthermore, the photo of Sun Yuchen and Li Lin embracing and toasting, which was taken at the conference, led to more speculation about their relationship. In the photo, the two were smiling and intimate, behaving like long-lost friends, completely unlike two months ago when they had a $30 million financial dispute. This may be a staged performance of cryptocurrency bigwigs in public settings, or perhaps it is a reconciliation behind closed doors, leaving the mystery of the Sun-Lin "love-hate" relationship.
Speaking of toasting, Li Lin is not the only one who has toasted with other cryptocurrency bigwigs. Back in 2018, Li Lin drank and toasted with OKEx's founder, Star Xu, while eating barbecue by the roadside. They also toasted at dinner parties. When OKEx couldn't withdraw coins, Star Xu was invited for tea, and Li Lin voiced his support for Star Xu in the community. Although there is an element of play-acting, it indeed expressed the mutual respect among entrepreneurs in the cryptocurrency industry, which is flourishing and full of opportunities and risks, with the vision of jointly making the cryptocurrency industry stronger and better. Later on, Star Xu called out to Li Lin: "Drinking a toast makes true brothers. Thanks to Huobi's Li Lin for stepping forward to heal my pain."
CZ and Sun Yuchen: Frenemies, Love-Hate Relationship
Sun Yuchen and CZ are both regarded as leaders in the crypto field. Sun Yuchen founded TRON and led Huobi HTX, while CZ founded Binance, creating an ecosystem of complementarity and competition. Both have graced the cover of Forbes magazine, showcasing their global influence. As industry pioneers, the ups and downs between them are also part of the history of the cryptocurrency industry.
As early as 2015, He Yi, Sun Yuchen, and Luo Min, CEO of Qudian, appeared together on the reality show "Only You Can't". They wore jumpsuits with goat horns and white hats and performed a song called the "Twisted Goat Song." At that time, He Yi and CZ had only known each other for a year and were both working at OKCoin, holding the positions of Vice President and CTO, respectively. The gears of fate quietly turned, and these young people, still immersed in the excitement of entering a new industry, may have difficulty imagining that the future of the cryptocurrency industry will be disrupted because of them.
The early years of the crypto world were full of infinite possibilities and imagination, with Justin Sun and CZ in a stage of mutual cooperation and mutual achievement.
In October 2018, Justin Sun and CZ met at the Geneva World Investment Forum. At the time, it was the 73rd anniversary of the founding of the United Nations. Binance established a blockchain charity foundation and launched a blockchain-based donation platform to support countries such as Uganda affected by floods and landslides. The Tron Foundation also donated $3 million to support blockchain charity work.
2019 was a "honeymoon period" for Justin Sun and CZ. On January 28, BitTorrent (BTT), a project previously acquired by Justin Sun, completed the issuance of 5.94 billion BTT on the Binance Launchpad blockchain asset issuance platform in about 14 minutes, raising $7.1 million. BitTorrent became Binance's first IEO project, marking the beginning of CZ's and Justin Sun's early cooperation. In April, after TRON launched TRC20-USDT, Binance quickly provided support and launched the "Earn 16% APY by Staking TRC20-USDT" activity to introduce a large amount of liquidity to the TRON ecosystem. At the same time, Justin Sun frequently promoted Binance on Weibo and Twitter, vigorously publicizing this cooperation achievement. During that time, their cooperation was exemplary—Justin Sun used Binance's platform influence to promote the TRON ecosystem, while Binance attracted more USDT users by leveraging TRON's new chain and high-interest rate subsidies, achieving a win-win situation.
In September 2019, Binance and Paxos Trust Company's collaboration launched the stablecoin Binance USD (BUSD), which surpassed a market cap of $1 billion in less than two years. On September 5, 2022, shortly after BUSD's market cap reached $20 billion, Binance announced that it would stop using the three stablecoins—USDC, USDP, and TUSD—competing with BUSD, officially declaring war on the stablecoin giant USDC.
The smooth issuance and great success of BUSD allowed CZ to gradually build his own crypto empire leveraging the platform's strengths. Just a month after Binance announced the redemption plan, on October 28, 2022, Huobi Global, which had just been taken over by Justin Sun 20 days earlier, announced that HUSD triggered the Eleventh Article of Huobi Global Token Management Rules, halting HUSD trading and implementing delisting on the same day, with users' HUSD directly converted to USDT. This news caused a stir in the market as HUSD lost its peg, rapidly devalued, plummeting to $0.3 on November 1, and thereafter declined continuously, completely withdrawing from the stablecoin competitive market.
Interestingly, HUSD is also a stablecoin project launched through a partnership between Huobi and Paxos. In a blog post commemorating the one-year anniversary of HUSD in July 2022, the Paxos team wrote, "Paxos now supports 3 of the top 6 stablecoins in the world, and we are proud of this fact. As the first regulated trust company and qualified custodian for digital assets, Paxos has unique expertise in this market."
Following the anniversary blog post, one month later, Paxos co-founder Rich Teo was seen dining at a high-end restaurant overseas with Binance CEO CZ, causing some controversy within the crypto community. Two months later, HUSD announced its termination, and Paxos became the "full-time steward" of BUSD. Speculation arose within the community that this dinner meeting may have involved strategic discussions about the stablecoin market, potentially influencing Huobi's decision regarding HUSD. However, these speculations lack direct evidence and have not been officially confirmed.
Related Reading: "The Four-Year Rise and Fall of the $15 Billion Stablecoin Empire: The Ambitions and Regrets of BUSD"
Two months after the delisting of HUSD, on December 30, 2022, Binance announced the completion of the integration of Binance-Peg BUSD on the TRON network. Deposits and withdrawals of BUSD are now open on the TRON network, and Justin Sun actively promoted the collaboration with Binance on Twitter. Regardless of any past disagreements between the two over stablecoin partnerships, at least for now, everything seems to be in a harmonious and prosperous state.
However, the two individuals' game of stablecoins continues behind the scenes.
In May 2023, Justin Sun transferred 405 million TUSD to Binance, allegedly to participate in Binance LaunchPool's SUI token mining activity. This sparked debates within the crypto community, with some accusing CZ of assisting a whale by enabling Sun to acquire the new SUI token through Binance's exchange pool incentives, suggesting potential "insider trading." As the public opinion intensified, Sun clarified that the initial purpose of the transfer was to act as a TUSD market maker to "arbitrage the spread" and improve liquidity, not to participate in the event. Any funds mistakenly used in the event were refunded through contact with the exchange. Subsequently, CZ publicly stated that if Sun used the TUSD for mining, action would be taken, emphasizing that LaunchPool serves retail users, not whales. The $405 million drama concluded within the disclaimers of the two bosses.
It is worth noting that TUSD is the "successor token" to BUSD. On February 13, 2023, SEC enforcement officials issued a "Wells Notice" to Paxos, stating that the BUSD issued and listed by Paxos is an unregistered security, and they plan to sue Paxos for violating investor protection laws. Under strong regulatory intervention, Binance continued to delist BUSD trading pairs, and BUSD, which once had a market capitalization of up to $22 billion, gradually faded from the stage of history. Subsequently, Binance turned its attention to another stablecoin—TUSD. Binance took a series of measures, such as adding TUSD trading pairs, opening a TUSD Pool on Launchpool, and offering zero fees on BTC/TUSD trading pairs, vigorously supporting the BTC/TUSD trading pair. In March 2023, the BTC/TUSD trading pair surpassed the BTC/USDT trading pair, becoming Binance's largest trading pair in terms of trading volume. After Binance halted BUSD issuances, its support for TUSD, USDC, and other stablecoins put additional pressure on Justin Sun's TRC-USDT.
Related reading: "TUSD, It's Time to Reacquaint Yourself with the Binance Newcomer"
On April 3, 2025, Justin Sun suddenly accused First Digital Trust (FDT) of insolvency, unable to fulfill customer fund redemptions. FDT is the issuer of the stablecoin FDUSD and the asset management institution for TUSD. On the same day, in a live press conference, Justin Sun stated that as early as 2023, Techteryx had investigated FDT and discovered that a large amount of client funds under custody had been misappropriated. At that time, Justin Sun personally provided assistance to Techteryx with his own funds, ensuring that TUSD had sufficient liquidity. TrueCoin was suspected of colluding with FDT to illegally transfer $456 million of TUSD reserve funds to a company in Dubai. First Digital later responded to the accusations, stating that the dispute only involved TUSD and was completely unrelated to FDUSD, and that First Digital had the full ability to make payments.
Undoubtedly, this move and Binance's subsequent suspected "informing large holders only in small circles and cutting retail investors" behavior once again plunged CZ and He Yi into an urgent public relations crisis, sparking dissatisfaction with centralized exchanges in the market. Justin Sun's role in this episode appears much more righteous, exposing insider trading and safeguarding all investors' rights. Perhaps Justin Sun's original intention was simply to reclaim his $500 million deposit, which is not directly related to Binance. However, during the brief decoupling of FDUSD, Binance, caught in the crossfire, was still embroiled in a public opinion battle.
Despite the rivalry between the two in business, Sun Yuchen has publicly spoken up for CZ in the crypto circle on multiple occasions. Following the June 2023 SEC lawsuit against Binance incident, Sun Yuchen openly expressed support for CZ on social media, stating, "As a friend of CZ, I am willing to resolutely support CZ and believe that justice will prevail." In November 2023, CZ announced his resignation as Binance CEO, and Sun Yuchen highly praised CZ's contributions on social media, mentioning their nearly decade-long acquaintance, applauding his leadership and industry drive, stating that he "has propelled the industry to unprecedented heights," and emphasizing continuing to strengthen cooperation with Binance in the future.
When photos of a "wine-sharing ceremony" between Li Lin and Sun Yuchen flooded social media, and when CZ and Sun Yuchen were seen laughing together at a summit, onlookers found it difficult to distinguish whether this was a scripted scene or a genuine reconciliation. However, perhaps the answer is not essential—within the crypto industry, a consensus of interest is far more cohesive than personal grievances. From the early days of the grassroots community to the current wave of compliance, the rivalry history of these tycoons is precisely a footnote to the industry's evolution; their enmity and cooperation are fundamentally exploring a path that aligns with regulatory frameworks while staying true to the blockchain's original intention.
Just as Sun Yuchen said in a Forbes interview: "True innovators must adhere to long-termism." As the smiles in the group photo are frozen in time, the vibrant night in Hong Kong still shines, and the script of the crypto industry continues to be written—the next scene may be more intense competition or another hand-in-hand moment in crisis. The only certainty is that the allure of this industry lies within the stories of these "frenemies."
You may also like
Token Cannot Compound, Where Is the Real Investment Opportunity?
February 6th Market Key Intelligence, How Much Did You Miss?
China's Central Bank and Eight Other Departments' Latest Regulatory Focus: Key Attention to RWA Tokenized Asset Risk
Foreword: Today, the People's Bank of China's website published the "Notice of the People's Bank of China, National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Public Security, State Administration for Market Regulation, China Banking and Insurance Regulatory Commission, China Securities Regulatory Commission, State Administration of Foreign Exchange on Further Preventing and Dealing with Risks Related to Virtual Currency and Others (Yinfa [2026] No. 42)", the latest regulatory requirements from the eight departments including the central bank, which are basically consistent with the regulatory requirements of recent years. The main focus of the regulation is on speculative activities such as virtual currency trading, exchanges, ICOs, overseas platform services, and this time, regulatory oversight of RWA has been added, explicitly prohibiting RWA tokenization, stablecoins (especially those pegged to the RMB). The following is the full text:
To the people's governments of all provinces, autonomous regions, and municipalities directly under the Central Government, the Xinjiang Production and Construction Corps:
Recently, there have been speculative activities related to virtual currency and Real-World Assets (RWA) tokenization, disrupting the economic and financial order and jeopardizing the property security of the people. In order to further prevent and address the risks related to virtual currency and Real-World Assets tokenization, effectively safeguard national security and social stability, in accordance with the "Law of the People's Republic of China on the People's Bank of China," "Law of the People's Republic of China on Commercial Banks," "Securities Law of the People's Republic of China," "Law of the People's Republic of China on Securities Investment Funds," "Law of the People's Republic of China on Futures and Derivatives," "Cybersecurity Law of the People's Republic of China," "Regulations of the People's Republic of China on the Administration of Renminbi," "Regulations on Prevention and Disposal of Illegal Fundraising," "Regulations of the People's Republic of China on Foreign Exchange Administration," "Telecommunications Regulations of the People's Republic of China," and other provisions, after reaching consensus with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, and with the approval of the State Council, the relevant matters are notified as follows:
(I) Virtual currency does not possess the legal status equivalent to fiat currency. Virtual currencies such as Bitcoin, Ether, Tether, etc., have the main characteristics of being issued by non-monetary authorities, using encryption technology and distributed ledger or similar technology, existing in digital form, etc. They do not have legal tender status, should not and cannot be circulated and used as currency in the market.
The business activities related to virtual currency are classified as illegal financial activities. The exchange of fiat currency and virtual currency within the territory, exchange of virtual currencies, acting as a central counterparty in buying and selling virtual currencies, providing information intermediary and pricing services for virtual currency transactions, token issuance financing, and trading of virtual currency-related financial products, etc., fall under illegal financial activities, such as suspected illegal issuance of token vouchers, unauthorized public issuance of securities, illegal operation of securities and futures business, illegal fundraising, etc., are strictly prohibited across the board and resolutely banned in accordance with the law. Overseas entities and individuals are not allowed to provide virtual currency-related services to domestic entities in any form.
A stablecoin pegged to a fiat currency indirectly fulfills some functions of the fiat currency in circulation. Without the consent of relevant authorities in accordance with the law and regulations, any domestic or foreign entity or individual is not allowed to issue a RMB-pegged stablecoin overseas.
（II）Tokenization of Real-World Assets refers to the use of encryption technology and distributed ledger or similar technologies to transform ownership rights, income rights, etc., of assets into tokens (tokens) or other interests or bond certificates with token (token) characteristics, and carry out issuance and trading activities.
Engaging in the tokenization of real-world assets domestically, as well as providing related intermediary, information technology services, etc., which are suspected of illegal issuance of token vouchers, unauthorized public offering of securities, illegal operation of securities and futures business, illegal fundraising, and other illegal financial activities, shall be prohibited; except for relevant business activities carried out with the approval of the competent authorities in accordance with the law and regulations and relying on specific financial infrastructures. Overseas entities and individuals are not allowed to illegally provide services related to the tokenization of real-world assets to domestic entities in any form.
(III) Inter-agency Coordination. The People's Bank of China, together with the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Public Security, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, the State Administration of Foreign Exchange, and other departments, will improve the work mechanism, strengthen coordination with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, coordinate efforts, and overall guide regions to carry out risk prevention and disposal of virtual currency-related illegal financial activities.
The China Securities Regulatory Commission, together with the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Public Security, the People's Bank of China, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the State Administration of Foreign Exchange, and other departments, will improve the work mechanism, strengthen coordination with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, coordinate efforts, and overall guide regions to carry out risk prevention and disposal of illegal financial activities related to the tokenization of real-world assets.
(IV) Strengthening Local Implementation. The people's governments at the provincial level are overall responsible for the prevention and disposal of risks related to virtual currencies and the tokenization of real-world assets in their respective administrative regions. The specific leading department is the local financial regulatory department, with participation from branches and dispatched institutions of the State Council's financial regulatory department, telecommunications regulators, public security, market supervision, and other departments, in coordination with cyberspace departments, courts, and procuratorates, to improve the normalization of the work mechanism, effectively connect with the relevant work mechanisms of central departments, form a cooperative and coordinated working pattern between central and local governments, effectively prevent and properly handle risks related to virtual currencies and the tokenization of real-world assets, and maintain economic and financial order and social stability.
(5) Enhanced Risk Monitoring. The People's Bank of China, China Securities Regulatory Commission, National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Public Security, State Administration of Foreign Exchange, Cyberspace Administration of China, and other departments continue to improve monitoring techniques and system support, enhance cross-departmental data analysis and sharing, establish sound information sharing and cross-validation mechanisms, promptly grasp the risk situation of activities related to virtual currency and real-world asset tokenization. Local governments at all levels give full play to the role of local monitoring and early warning mechanisms. Local financial regulatory authorities, together with branches and agencies of the State Council's financial regulatory authorities, as well as departments of cyberspace and public security, ensure effective connection between online monitoring, offline investigation, and fund tracking, efficiently and accurately identify activities related to virtual currency and real-world asset tokenization, promptly share risk information, improve early warning information dissemination, verification, and rapid response mechanisms.
(6) Strengthened Oversight of Financial Institutions, Intermediaries, and Technology Service Providers. Financial institutions (including non-bank payment institutions) are prohibited from providing account opening, fund transfer, and clearing services for virtual currency-related business activities, issuing and selling financial products related to virtual currency, including virtual currency and related financial products in the scope of collateral, conducting insurance business related to virtual currency, or including virtual currency in the scope of insurance liability. Financial institutions (including non-bank payment institutions) are prohibited from providing custody, clearing, and settlement services for unauthorized real-world asset tokenization-related business and related financial products. Relevant intermediary institutions and information technology service providers are prohibited from providing intermediary, technical, or other services for unauthorized real-world asset tokenization-related businesses and related financial products.
(7) Enhanced Management of Internet Information Content and Access. Internet enterprises are prohibited from providing online business venues, commercial displays, marketing, advertising, or paid traffic diversion services for virtual currency and real-world asset tokenization-related business activities. Upon discovering clues of illegal activities, they should promptly report to relevant departments and provide technical support and assistance for related investigations and inquiries. Based on the clues transferred by the financial regulatory authorities, the cyberspace administration, telecommunications authorities, and public security departments should promptly close and deal with websites, mobile applications (including mini-programs), and public accounts engaged in virtual currency and real-world asset tokenization-related business activities in accordance with the law.
(8) Strengthened Entity Registration and Advertisement Management. Market supervision departments strengthen entity registration and management, and enterprise and individual business registrations must not contain terms such as "virtual currency," "virtual asset," "cryptocurrency," "crypto asset," "stablecoin," "real-world asset tokenization," or "RWA" in their names or business scopes. Market supervision departments, together with financial regulatory authorities, legally enhance the supervision of advertisements related to virtual currency and real-world asset tokenization, promptly investigating and handling relevant illegal advertisements.
（IX） Continued Rectification of Virtual Currency Mining Activities. The National Development and Reform Commission, together with relevant departments, strictly controls virtual currency mining activities, continuously promotes the rectification of virtual currency mining activities. The people's governments of various provinces take overall responsibility for the rectification of "mining" within their respective administrative regions. In accordance with the requirements of the National Development and Reform Commission and other departments in the "Notice on the Rectification of Virtual Currency Mining Activities" (NDRC Energy-saving Building [2021] No. 1283) and the provisions of the "Guidance Catalog for Industrial Structure Adjustment (2024 Edition)," a comprehensive review, investigation, and closure of existing virtual currency mining projects are conducted, new mining projects are strictly prohibited, and mining machine production enterprises are strictly prohibited from providing mining machine sales and other services within the country.
（X） Severe Crackdown on Related Illegal Financial Activities. Upon discovering clues to illegal financial activities related to virtual currency and the tokenization of real-world assets, local financial regulatory authorities, branches of the State Council's financial regulatory authorities, and other relevant departments promptly investigate, determine, and properly handle the issues in accordance with the law, and seriously hold the relevant entities and individuals legally responsible. Those suspected of crimes are transferred to the judicial authorities for processing according to the law.
（XI） Severe Crackdown on Related Illegal and Criminal Activities. The Ministry of Public Security, the People's Bank of China, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, as well as judicial and procuratorial organs, in accordance with their respective responsibilities, rigorously crack down on illegal and criminal activities related to virtual currency, the tokenization of real-world assets, such as fraud, money laundering, illegal business operations, pyramid schemes, illegal fundraising, and other illegal and criminal activities carried out under the guise of virtual currency, the tokenization of real-world assets, etc.
（XII） Strengthen Industry Self-discipline. Relevant industry associations should enhance membership management and policy advocacy, based on their own responsibilities, advocate and urge member units to resist illegal financial activities related to virtual currency and the tokenization of real-world assets. Member units that violate regulatory policies and industry self-discipline rules are to be disciplined in accordance with relevant self-regulatory management regulations. By leveraging various industry infrastructure, conduct risk monitoring related to virtual currency, the tokenization of real-world assets, and promptly transfer issue clues to relevant departments.
（XIII） Without the approval of relevant departments in accordance with the law and regulations, domestic entities and foreign entities controlled by them may not issue virtual currency overseas.
（XIV） Domestic entities engaging directly or indirectly in overseas external debt-based tokenization of real-world assets, or conducting asset securitization activities abroad based on domestic ownership rights, income rights, etc. (hereinafter referred to as domestic equity), should be strictly regulated in accordance with the principles of "same business, same risk, same rules." The National Development and Reform Commission, the China Securities Regulatory Commission, the State Administration of Foreign Exchange, and other relevant departments regulate it according to their respective responsibilities. For other forms of overseas real-world asset tokenization activities based on domestic equity by domestic entities, the China Securities Regulatory Commission, together with relevant departments, supervise according to their division of responsibilities. Without the consent and filing of relevant departments, no unit or individual may engage in the above-mentioned business.
(15) Overseas subsidiaries and branches of domestic financial institutions providing Real World Asset Tokenization-related services overseas shall do so legally and prudently. They shall have professional personnel and systems in place to effectively mitigate business risks, strictly implement customer onboarding, suitability management, anti-money laundering requirements, and incorporate them into the domestic financial institutions' compliance and risk management system. Intermediaries and information technology service providers offering Real World Asset Tokenization services abroad based on domestic equity or conducting Real World Asset Tokenization business in the form of overseas debt for domestic entities directly or indirectly venturing abroad must strictly comply with relevant laws and regulations. They should establish and improve relevant compliance and internal control systems in accordance with relevant normative requirements, strengthen business and risk control, and report the business developments to the relevant regulatory authorities for approval or filing.
(16) Strengthen organizational leadership and overall coordination. All departments and regions should attach great importance to the prevention of risks related to virtual currencies and Real World Asset Tokenization, strengthen organizational leadership, clarify work responsibilities, form a long-term effective working mechanism with centralized coordination, local implementation, and shared responsibilities, maintain high pressure, dynamically monitor risks, effectively prevent and mitigate risks in an orderly and efficient manner, legally protect the property security of the people, and make every effort to maintain economic and financial order and social stability.
(17) Widely carry out publicity and education. All departments, regions, and industry associations should make full use of various media and other communication channels to disseminate information through legal and policy interpretation, analysis of typical cases, and education on investment risks, etc. They should promote the illegality and harm of virtual currencies and Real World Asset Tokenization-related businesses and their manifestations, fully alert to potential risks and hidden dangers, and enhance public awareness and identification capabilities for risk prevention.
(18) Engaging in illegal financial activities related to virtual currencies and Real World Asset Tokenization in violation of this notice, as well as providing services for virtual currencies and Real World Asset Tokenization-related businesses, shall be punished in accordance with relevant regulations. If it constitutes a crime, criminal liability shall be pursued according to the law. For domestic entities and individuals who knowingly or should have known that overseas entities illegally provided virtual currency or Real World Asset Tokenization-related services to domestic entities and still assisted them, relevant responsibilities shall be pursued according to the law. If it constitutes a crime, criminal liability shall be pursued according to the law.
(19) If any unit or individual invests in virtual currencies, Real World Asset Tokens, and related financial products against public order and good customs, the relevant civil legal actions shall be invalid, and any resulting losses shall be borne by them. If there are suspicions of disrupting financial order and jeopardizing financial security, the relevant departments shall deal with them according to the law.
This notice shall enter into force upon the date of its issuance. The People's Bank of China and ten other departments' "Notice on Further Preventing and Dealing with the Risks of Virtual Currency Trading Speculation" (Yinfa [2021] No. 237) is hereby repealed.
Former Partner's Perspective on Multicoin: Kyle's Exit, But the Game He Left Behind Just Getting Started
Why Bitcoin Is Falling Now: The Real Reasons Behind BTC's Crash & WEEX's Smart Profit Playbook
Bitcoin's ongoing crash explained: Discover the 5 hidden triggers behind BTC's plunge & how WEEX's Auto Earn and Trade to Earn strategies help traders profit from crypto market volatility.
Wall Street's Hottest Trades See Exodus
Vitalik Discusses Ethereum Scaling Path, Circle Announces Partnership with Polymarket, What's the Overseas Crypto Community Talking About Today?
Believing in the Capital Markets - The Essence and Core Value of Cryptocurrency
Polymarket's 'Weatherman': Predict Temperature, Win Million-Dollar Payout
$15K+ Profits: The 4 AI Trading Secrets WEEX Hackathon Prelim Winners Used to Dominate Volatile Crypto Markets
How WEEX Hackathon's top AI trading strategies made $15K+ in crypto markets: 4 proven rules for ETH/BTC trading, market structure analysis, and risk management in volatile conditions.
A nearly 20% one-day plunge, how long has it been since you last saw a $60,000 Bitcoin?
Raoul Pal: I've seen every single panic, and they are never the end.
Key Market Information Discrepancy on February 6th - A Must-Read! | Alpha Morning Report
2026 Crypto Industry's First Snowfall
The Harsh Reality Behind the $26 Billion Crypto Liquidation: Liquidity Is Killing the Market
Why Is Gold, US Stocks, Bitcoin All Falling?
Key Market Intelligence for February 5th, how much did you miss out on?
Wintermute: By 2026, crypto had gradually become the settlement layer of the Internet economy
Token Cannot Compound, Where Is the Real Investment Opportunity?
February 6th Market Key Intelligence, How Much Did You Miss?
China's Central Bank and Eight Other Departments' Latest Regulatory Focus: Key Attention to RWA Tokenized Asset Risk
Foreword: Today, the People's Bank of China's website published the "Notice of the People's Bank of China, National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Public Security, State Administration for Market Regulation, China Banking and Insurance Regulatory Commission, China Securities Regulatory Commission, State Administration of Foreign Exchange on Further Preventing and Dealing with Risks Related to Virtual Currency and Others (Yinfa [2026] No. 42)", the latest regulatory requirements from the eight departments including the central bank, which are basically consistent with the regulatory requirements of recent years. The main focus of the regulation is on speculative activities such as virtual currency trading, exchanges, ICOs, overseas platform services, and this time, regulatory oversight of RWA has been added, explicitly prohibiting RWA tokenization, stablecoins (especially those pegged to the RMB). The following is the full text:
To the people's governments of all provinces, autonomous regions, and municipalities directly under the Central Government, the Xinjiang Production and Construction Corps:
Recently, there have been speculative activities related to virtual currency and Real-World Assets (RWA) tokenization, disrupting the economic and financial order and jeopardizing the property security of the people. In order to further prevent and address the risks related to virtual currency and Real-World Assets tokenization, effectively safeguard national security and social stability, in accordance with the "Law of the People's Republic of China on the People's Bank of China," "Law of the People's Republic of China on Commercial Banks," "Securities Law of the People's Republic of China," "Law of the People's Republic of China on Securities Investment Funds," "Law of the People's Republic of China on Futures and Derivatives," "Cybersecurity Law of the People's Republic of China," "Regulations of the People's Republic of China on the Administration of Renminbi," "Regulations on Prevention and Disposal of Illegal Fundraising," "Regulations of the People's Republic of China on Foreign Exchange Administration," "Telecommunications Regulations of the People's Republic of China," and other provisions, after reaching consensus with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, and with the approval of the State Council, the relevant matters are notified as follows:
(I) Virtual currency does not possess the legal status equivalent to fiat currency. Virtual currencies such as Bitcoin, Ether, Tether, etc., have the main characteristics of being issued by non-monetary authorities, using encryption technology and distributed ledger or similar technology, existing in digital form, etc. They do not have legal tender status, should not and cannot be circulated and used as currency in the market.
The business activities related to virtual currency are classified as illegal financial activities. The exchange of fiat currency and virtual currency within the territory, exchange of virtual currencies, acting as a central counterparty in buying and selling virtual currencies, providing information intermediary and pricing services for virtual currency transactions, token issuance financing, and trading of virtual currency-related financial products, etc., fall under illegal financial activities, such as suspected illegal issuance of token vouchers, unauthorized public issuance of securities, illegal operation of securities and futures business, illegal fundraising, etc., are strictly prohibited across the board and resolutely banned in accordance with the law. Overseas entities and individuals are not allowed to provide virtual currency-related services to domestic entities in any form.
A stablecoin pegged to a fiat currency indirectly fulfills some functions of the fiat currency in circulation. Without the consent of relevant authorities in accordance with the law and regulations, any domestic or foreign entity or individual is not allowed to issue a RMB-pegged stablecoin overseas.
（II）Tokenization of Real-World Assets refers to the use of encryption technology and distributed ledger or similar technologies to transform ownership rights, income rights, etc., of assets into tokens (tokens) or other interests or bond certificates with token (token) characteristics, and carry out issuance and trading activities.
Engaging in the tokenization of real-world assets domestically, as well as providing related intermediary, information technology services, etc., which are suspected of illegal issuance of token vouchers, unauthorized public offering of securities, illegal operation of securities and futures business, illegal fundraising, and other illegal financial activities, shall be prohibited; except for relevant business activities carried out with the approval of the competent authorities in accordance with the law and regulations and relying on specific financial infrastructures. Overseas entities and individuals are not allowed to illegally provide services related to the tokenization of real-world assets to domestic entities in any form.
(III) Inter-agency Coordination. The People's Bank of China, together with the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Public Security, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, the State Administration of Foreign Exchange, and other departments, will improve the work mechanism, strengthen coordination with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, coordinate efforts, and overall guide regions to carry out risk prevention and disposal of virtual currency-related illegal financial activities.
The China Securities Regulatory Commission, together with the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Public Security, the People's Bank of China, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the State Administration of Foreign Exchange, and other departments, will improve the work mechanism, strengthen coordination with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, coordinate efforts, and overall guide regions to carry out risk prevention and disposal of illegal financial activities related to the tokenization of real-world assets.
(IV) Strengthening Local Implementation. The people's governments at the provincial level are overall responsible for the prevention and disposal of risks related to virtual currencies and the tokenization of real-world assets in their respective administrative regions. The specific leading department is the local financial regulatory department, with participation from branches and dispatched institutions of the State Council's financial regulatory department, telecommunications regulators, public security, market supervision, and other departments, in coordination with cyberspace departments, courts, and procuratorates, to improve the normalization of the work mechanism, effectively connect with the relevant work mechanisms of central departments, form a cooperative and coordinated working pattern between central and local governments, effectively prevent and properly handle risks related to virtual currencies and the tokenization of real-world assets, and maintain economic and financial order and social stability.
(5) Enhanced Risk Monitoring. The People's Bank of China, China Securities Regulatory Commission, National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Public Security, State Administration of Foreign Exchange, Cyberspace Administration of China, and other departments continue to improve monitoring techniques and system support, enhance cross-departmental data analysis and sharing, establish sound information sharing and cross-validation mechanisms, promptly grasp the risk situation of activities related to virtual currency and real-world asset tokenization. Local governments at all levels give full play to the role of local monitoring and early warning mechanisms. Local financial regulatory authorities, together with branches and agencies of the State Council's financial regulatory authorities, as well as departments of cyberspace and public security, ensure effective connection between online monitoring, offline investigation, and fund tracking, efficiently and accurately identify activities related to virtual currency and real-world asset tokenization, promptly share risk information, improve early warning information dissemination, verification, and rapid response mechanisms.
(6) Strengthened Oversight of Financial Institutions, Intermediaries, and Technology Service Providers. Financial institutions (including non-bank payment institutions) are prohibited from providing account opening, fund transfer, and clearing services for virtual currency-related business activities, issuing and selling financial products related to virtual currency, including virtual currency and related financial products in the scope of collateral, conducting insurance business related to virtual currency, or including virtual currency in the scope of insurance liability. Financial institutions (including non-bank payment institutions) are prohibited from providing custody, clearing, and settlement services for unauthorized real-world asset tokenization-related business and related financial products. Relevant intermediary institutions and information technology service providers are prohibited from providing intermediary, technical, or other services for unauthorized real-world asset tokenization-related businesses and related financial products.
(7) Enhanced Management of Internet Information Content and Access. Internet enterprises are prohibited from providing online business venues, commercial displays, marketing, advertising, or paid traffic diversion services for virtual currency and real-world asset tokenization-related business activities. Upon discovering clues of illegal activities, they should promptly report to relevant departments and provide technical support and assistance for related investigations and inquiries. Based on the clues transferred by the financial regulatory authorities, the cyberspace administration, telecommunications authorities, and public security departments should promptly close and deal with websites, mobile applications (including mini-programs), and public accounts engaged in virtual currency and real-world asset tokenization-related business activities in accordance with the law.
(8) Strengthened Entity Registration and Advertisement Management. Market supervision departments strengthen entity registration and management, and enterprise and individual business registrations must not contain terms such as "virtual currency," "virtual asset," "cryptocurrency," "crypto asset," "stablecoin," "real-world asset tokenization," or "RWA" in their names or business scopes. Market supervision departments, together with financial regulatory authorities, legally enhance the supervision of advertisements related to virtual currency and real-world asset tokenization, promptly investigating and handling relevant illegal advertisements.
（IX） Continued Rectification of Virtual Currency Mining Activities. The National Development and Reform Commission, together with relevant departments, strictly controls virtual currency mining activities, continuously promotes the rectification of virtual currency mining activities. The people's governments of various provinces take overall responsibility for the rectification of "mining" within their respective administrative regions. In accordance with the requirements of the National Development and Reform Commission and other departments in the "Notice on the Rectification of Virtual Currency Mining Activities" (NDRC Energy-saving Building [2021] No. 1283) and the provisions of the "Guidance Catalog for Industrial Structure Adjustment (2024 Edition)," a comprehensive review, investigation, and closure of existing virtual currency mining projects are conducted, new mining projects are strictly prohibited, and mining machine production enterprises are strictly prohibited from providing mining machine sales and other services within the country.
（X） Severe Crackdown on Related Illegal Financial Activities. Upon discovering clues to illegal financial activities related to virtual currency and the tokenization of real-world assets, local financial regulatory authorities, branches of the State Council's financial regulatory authorities, and other relevant departments promptly investigate, determine, and properly handle the issues in accordance with the law, and seriously hold the relevant entities and individuals legally responsible. Those suspected of crimes are transferred to the judicial authorities for processing according to the law.
（XI） Severe Crackdown on Related Illegal and Criminal Activities. The Ministry of Public Security, the People's Bank of China, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, as well as judicial and procuratorial organs, in accordance with their respective responsibilities, rigorously crack down on illegal and criminal activities related to virtual currency, the tokenization of real-world assets, such as fraud, money laundering, illegal business operations, pyramid schemes, illegal fundraising, and other illegal and criminal activities carried out under the guise of virtual currency, the tokenization of real-world assets, etc.
（XII） Strengthen Industry Self-discipline. Relevant industry associations should enhance membership management and policy advocacy, based on their own responsibilities, advocate and urge member units to resist illegal financial activities related to virtual currency and the tokenization of real-world assets. Member units that violate regulatory policies and industry self-discipline rules are to be disciplined in accordance with relevant self-regulatory management regulations. By leveraging various industry infrastructure, conduct risk monitoring related to virtual currency, the tokenization of real-world assets, and promptly transfer issue clues to relevant departments.
（XIII） Without the approval of relevant departments in accordance with the law and regulations, domestic entities and foreign entities controlled by them may not issue virtual currency overseas.
（XIV） Domestic entities engaging directly or indirectly in overseas external debt-based tokenization of real-world assets, or conducting asset securitization activities abroad based on domestic ownership rights, income rights, etc. (hereinafter referred to as domestic equity), should be strictly regulated in accordance with the principles of "same business, same risk, same rules." The National Development and Reform Commission, the China Securities Regulatory Commission, the State Administration of Foreign Exchange, and other relevant departments regulate it according to their respective responsibilities. For other forms of overseas real-world asset tokenization activities based on domestic equity by domestic entities, the China Securities Regulatory Commission, together with relevant departments, supervise according to their division of responsibilities. Without the consent and filing of relevant departments, no unit or individual may engage in the above-mentioned business.
(15) Overseas subsidiaries and branches of domestic financial institutions providing Real World Asset Tokenization-related services overseas shall do so legally and prudently. They shall have professional personnel and systems in place to effectively mitigate business risks, strictly implement customer onboarding, suitability management, anti-money laundering requirements, and incorporate them into the domestic financial institutions' compliance and risk management system. Intermediaries and information technology service providers offering Real World Asset Tokenization services abroad based on domestic equity or conducting Real World Asset Tokenization business in the form of overseas debt for domestic entities directly or indirectly venturing abroad must strictly comply with relevant laws and regulations. They should establish and improve relevant compliance and internal control systems in accordance with relevant normative requirements, strengthen business and risk control, and report the business developments to the relevant regulatory authorities for approval or filing.
(16) Strengthen organizational leadership and overall coordination. All departments and regions should attach great importance to the prevention of risks related to virtual currencies and Real World Asset Tokenization, strengthen organizational leadership, clarify work responsibilities, form a long-term effective working mechanism with centralized coordination, local implementation, and shared responsibilities, maintain high pressure, dynamically monitor risks, effectively prevent and mitigate risks in an orderly and efficient manner, legally protect the property security of the people, and make every effort to maintain economic and financial order and social stability.
(17) Widely carry out publicity and education. All departments, regions, and industry associations should make full use of various media and other communication channels to disseminate information through legal and policy interpretation, analysis of typical cases, and education on investment risks, etc. They should promote the illegality and harm of virtual currencies and Real World Asset Tokenization-related businesses and their manifestations, fully alert to potential risks and hidden dangers, and enhance public awareness and identification capabilities for risk prevention.
(18) Engaging in illegal financial activities related to virtual currencies and Real World Asset Tokenization in violation of this notice, as well as providing services for virtual currencies and Real World Asset Tokenization-related businesses, shall be punished in accordance with relevant regulations. If it constitutes a crime, criminal liability shall be pursued according to the law. For domestic entities and individuals who knowingly or should have known that overseas entities illegally provided virtual currency or Real World Asset Tokenization-related services to domestic entities and still assisted them, relevant responsibilities shall be pursued according to the law. If it constitutes a crime, criminal liability shall be pursued according to the law.
(19) If any unit or individual invests in virtual currencies, Real World Asset Tokens, and related financial products against public order and good customs, the relevant civil legal actions shall be invalid, and any resulting losses shall be borne by them. If there are suspicions of disrupting financial order and jeopardizing financial security, the relevant departments shall deal with them according to the law.
This notice shall enter into force upon the date of its issuance. The People's Bank of China and ten other departments' "Notice on Further Preventing and Dealing with the Risks of Virtual Currency Trading Speculation" (Yinfa [2021] No. 237) is hereby repealed.
Former Partner's Perspective on Multicoin: Kyle's Exit, But the Game He Left Behind Just Getting Started
Why Bitcoin Is Falling Now: The Real Reasons Behind BTC's Crash & WEEX's Smart Profit Playbook
Bitcoin's ongoing crash explained: Discover the 5 hidden triggers behind BTC's plunge & how WEEX's Auto Earn and Trade to Earn strategies help traders profit from crypto market volatility.
App