In response to the dilemma that virtual currency assets involved in cases in mainland China cannot be directly converted into cash in recent years, on June 8, an article on the "Faqingyuan" public account, which operates in accordance with the capital's public security legal system, disclosed that in order to further standardize the management of virtual currencies involved in cases, the Beijing Municipal Public Security Bureau Legal Affairs Corps and the Beijing Equity Exchange (hereinafter referred to as "BCE") have explored a new cooperative mechanism for the disposal of virtual currencies involved in cases.
According to the information disclosed in the article, the Beijing Municipal Public Security Bureau Legal Affairs Corps and the Beijing Equity Exchange recently held a signing ceremony for the disposal of virtual currencies involved in the case and signed the "Framework Agreement on Cooperation in the Disposal of Virtual Currency Involved in the Case", which included the virtual currencies involved in the case in the category of "physical disposal" and established a judicial disposal model for virtual currencies involved in the case with qualified subjects, compliant processes, fair prices, and safety and reliability.
This innovative cooperation mechanism was prepared and planned a year ago. At present, the Beijing Stock Exchange has used this model to complete the disposal of virtual currencies involved in a case of the Shunyi Public Security Bureau. Relevant analysis and expectations point out that if the relevant mechanism is promoted to other parts of the country, it can provide relatively unified virtual asset disposal standards for law enforcement departments in various places.
The key channel for this model to form a "closed loop" is to sell it publicly through a compliant licensed exchange in Hong Kong, China. With the collaborative operation of multiple institutions, the detection and transfer of virtual currencies, inquiry transactions, and settlement of foreign exchange can be compressed to 24 hours.
Specifically, in 2017, the Beijing Municipal Public Security Bureau and the Beijing Municipal Finance Bureau took the lead in establishing a "green channel" for physical remittances to the state treasury, allowing the public security organs to transfer the property involved in the case that needs to be turned over to the state treasury in kind to the Beijing Stock Exchange designated by the financial department for disposal. In this innovation of the overseas disposal model, the specific operation is that the public security organs entrust the Beijing Stock Exchange to dispose of the physical virtual currency involved in the case. After accepting the entrustment, the Beijing Stock Exchange selects a professional service agency to test, receive, and transfer the virtual currency involved, and publicly realize and sell it through a compliant licensed exchange in Hong Kong, China. After completing the national foreign exchange management approval procedures, the settlement is transferred to the public security agency's special account for the funds involved in the case and turned over to the state treasury.
In terms of the transaction price, which has attracted much attention, the aforementioned article also pointed out that the reserve price will be set in accordance with the "Administrative Measures for Confiscated Property" of the Ministry of Finance, and the transaction will be completed at the best offer after inquiry to avoid the adverse consequences that may be caused by extreme market conditions and ensure that the transaction price is fair. In addition, the service agency selected by the Beijing Stock Exchange must provide a 110% performance bond in advance and record the entire process of disposal.
On June 9, relevant analysts in Hong Kong, China pointed out that the sale and realization of the virtual currency involved in the case through a licensed exchange in Hong Kong does not violate the relevant provisions of the state prohibiting domestic transactions, and can also apply to the Hong Kong court for assistance in execution in accordance with the Supreme People's Court's "Judicial Mutual Assistance Arrangement" when disputes arise.
This solution is therefore considered to have multiple advantages, including solving the two major problems that the relevant law enforcement departments in mainland China have long faced: "the virtual currency involved in the case cannot be directly disposed of and converted into cash in the country" and "cross-border disposal is high risk", reflecting the strategic value of Hong Kong, China in connecting mainland China with the global virtual currency ecosystem.
Since 2021, mainland China has completely banned virtual currency transactions and mining, and the mechanism for converting seized virtual currencies into traditional currencies is relatively lacking. Taking the recently disclosed PlusToken pyramid scheme case as an example, the relevant ruling shows that the law enforcement department has seized more than 194,000 Bitcoins, 830,000 Ethereums, 1.4 million Litecoins, etc. The seized virtual currencies will be handled in accordance with the law, and the proceeds will be confiscated and turned over to the state treasury. However, the specific disposal of the relevant virtual currencies has not been made public.
According to relevant analysis by the legal community in mainland China, the development of the model for handling virtual assets in mainland China in recent years can be roughly divided into three periods, namely, directly through the over-the-counter OTC (U merchants) of exchanges or private individuals, through third-party disposal companies to dispose of and realize cash overseas, and the current new exploration stage.
In terms of the price of disposing of virtual assets, on August 25, 2023, the Shandong Provincial Department of Finance and 17 other departments jointly issued the "Shandong Province Confiscated Items Disposal Work Procedures (Trial)" which pointed out that the prepaid cards and virtual currencies confiscated by law by law enforcement agencies can be negotiated with the merchants who issued the prepaid cards and virtual currencies, and the merchant will bid for recovery. The recovery price is agreed upon by both parties, and in principle shall not be less than 80% of the face value or balance of the virtual currency or prepaid card, and the two parties will sign a recovery agreement.
The establishment of the aforementioned disposal cooperation mechanism is believed to make the handling process of virtual currencies involved in the relevant cases in mainland China clearer. Taking this opportunity, Hong Kong, China's status as an international virtual asset center that has been actively built in recent years is also believed to be boosted.
In the financial ecology of Hong Kong, China, compliant licensed exchanges will be officially established from 2024. On June 1 of that year, the licensing system for virtual asset service providers (VASPs) in Hong Kong, China was officially implemented. All virtual asset trading platforms operating in Hong Kong must be licensed by the Hong Kong Securities Regulatory Commission in accordance with the Anti-Money Laundering Ordinance. Centralized virtual asset trading platforms that operate businesses in Hong Kong or actively promote their services to Hong Kong investors must be licensed and regulated by the SFC, including Category 1 (Securities Trading) and Category 7 (Providing Automated Trading Services) (Licenses 1 and 7) under the Securities and Futures Ordinance, and the Virtual Asset Trading Platform Operating License (AMLO) under the Anti-Money Laundering Ordinance.
So far, there are seven licensed virtual asset trading platforms in Hong Kong, China, namely OSL, Hashkey, HKVAX, HKbitEX, Accumulus, DFX Labs, and EX.IO.

In February 2025, the Hong Kong Securities and Futures Commission pointed out in its ASPIRe roadmap that a key focus of Hong Kong's future development is to expand the types of virtual asset products and services. It is necessary to meet the needs of different categories of investors while protecting investors, and at the same time enhance the international competitiveness and attractiveness of Hong Kong's virtual asset market.
According to a recent report by Caijing, the Financial Services and the Treasury Bureau of the Hong Kong Special Administrative Region Government is about to issue a second policy declaration on the development of virtual assets, which is believed to form a more stable complementary relationship with the aforementioned Hong Kong Securities and Futures Commission roadmap, thereby laying the foundation for the diversified and orderly development of virtual assets in the local area.