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Kandy Wong

The seizure of enormous cryptocurrency caches in two high-profile criminal cases in China – a former head of the central bank’s digital currency research institute accused of corruption, and an alleged scam centre kingpin linked to about US$15 billion in bitcoin – have sparked questions in the country about the safety and future of virtual money.
But analysts said the long-term trend for the assets, especially bitcoin, depended on institutional capital, interest rate expectations and the likelihood of the United States’ Digital Asset Market Clarity Act being signed into law this year.
Alleged Chinese crypto scam billionaire Chen Zhi was arrested in Cambodia on January 6 and extradited to China. Last year, US prosecutors seized about US$15 billion in bitcoin linked to Chen.
On Wednesday, state broadcaster China Central Television aired a documentary about the authorities tracking down bribes paid in cryptocurrencies to Yao Qian, who led the People’s Bank of China team that developed the digital yuan.
“While Chen is accused of crypto fraud and probably some element of coercion to scam investors, that is a separate issue to bitcoin’s price drop at the start of 2026, which is now at about 30 per cent lower than its all-time high,” said Sanjeev Aaron Williams, a Hong Kong-based lawyer who writes on geopolitical risk and the digital economy.
The trading of crypto assets has been banned for years in mainland China. The Chinese central bank, which has doubled down on efforts to promote the digital yuan, pledged a further crackdown on virtual money in October despite market calls for the introduction of yuan stablecoins.
Hong Kong, however, aims to become a global hub for crypto businesses.
Such actions may actually help strengthen longer-term confidence by curbing scams and illicit flows
Genevieve Donnellon-May, Pacific Forum
The price of one bitcoin reached an eight-week high of more than US$97,000 on Wednesday, but at the cryptocurrency’s peak last year it was worth nearly US$126,000. Williams said the US legislation, which would create a digital asset regulatory framework but is yet to pass the Senate, would play a role in shaping the price trend this year, along with economic factors such as interest rates and inflation risks.
Linh Tran, a market analyst at global multi-asset brokerage XS.com, said Chen’s arrest might exert downward pressure on bitcoin prices in the short term, but it was unlikely to become a decisive factor driving a prolonged bearish trend.
“Price advances in 2026 are likely to be more cautious and will require tangible support – particularly from real capital inflows, especially institutional capital,” she said, adding that she expected bitcoin to consolidate at around US$85,000 to US$95,000 before rising to US$100,000.
Chen’s bitcoin trove has been the subject of heated discussion on China’s RedNote social media platform, along with the vulnerabilities of blockchain technology’s highly touted encryption and decentralisation features. While an individual’s private keys and wallet data are protected by strong encryption, all bitcoin transactions can be read by anyone.
Genevieve Donnellon-May, a Vasey Fellow at the Pacific Forum, a foreign policy think tank based in Hawaii, said the cooperation of various governments to stop the operation of a transnational crime network was “a successful crackdown on criminal misuse of crypto – not a flaw in bitcoin itself”.
“Such actions may actually help strengthen longer-term confidence by curbing scams and illicit flows that harm the asset’s reputation,” she said.
Phyrex Ni, partner at blockchain and crypto firm BIP 32 Venture, said the entire bitcoin ecosystem had become “heavily enveloped” by financial infrastructure.
Practices such as “mining pool centralisation, the geographic distribution of nodes, know-your-customer requirements and stablecoin settlements have turned bitcoin into an asset that is secure for an average person but extremely unfriendly to high-risk entities”, he said.


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The Chen Zhi arrest might push bitcoin prices down temporarily, but analysts said other factors will have greater sway in the long term


The Chen Zhi arrest might push bitcoin prices down temporarily, but analysts said other factors will have greater sway in the long term.


Scam and corruption cases spark debate in China over cryptocurrencies’ future

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}The Chen Zhi arrest might push bitcoin prices down temporarily, but analysts said other factors will have greater sway in the long term

The Chen Zhi arrest might push bitcoin prices down temporarily, but analysts said other factors will have greater sway in the long term