China's new forex regulations require banks to monitor and report trades involving crypto assets, aiming to restrict cross-border crypto activities. The rules mandate the tracking of individuals' and institutions' identities, sources of funds, and trading frequencies. This move is expected to complicate crypto purchases for Chinese residents. The regulations specifically target risky foreign exchange trading, stretching to include cross-border gambling and underground banking related to cryptocurrencies. Legal experts assert that the tightened stance could further penalize crypto activities. China's ban on cryptocurrencies since 2019 has intensified, with the government highlighting energy usage and environmental concerns related to crypto mining. Despite the restrictions, China holds $18 billion in Bitcoin acquired through asset seizures linked to illegal activities, making it the second-largest holder of Bitcoin between countries. Former Binance CEO Changpeng Zhao noted that China could adopt a Bitcoin reserve strategy if it chose to act swiftly.

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