Written by: Lawyer Liu Honglin

Last night, after the release of two documents regarding cryptocurrency, my entire social circle was flooded with discussions.

I saw many colleagues writing articles to interpret the documents, and I also noticed that discussions about RWA among various institutions and teams on short video platforms became quite lively.

In the first half, everyone was concerned that the entire crypto world was about to tighten, collapse, or fail; later, there were voices celebrating a new spring in China, with some partners saying that China can finally issue tokens, and there were indeed many different opinions.

Last night, I recorded a short video in my office to share my basic views: from a strict perspective, there is indeed a clear contraction. Many crypto assets or Web3-related businesses that were previously in a gray area in China are facing significant survival challenges, such as mining. I also mentioned that China has finally left a door open for RWA. Of course, this expression may not be very precise, because according to the Securities Regulatory Commission, it is not actually RWA but is referred to as securities tokenization. However, from an industry perspective, securities tokenization may just be a type within the broader RWA framework we discuss.

So I think there is no need to be overly strict about the wording; it’s enough for everyone to understand the meaning the Securities Regulatory Commission wants to convey. Some journalists also interviewed me about my personal views on these two documents.

In the short video yesterday, I mainly talked about RWA, but I personally believe that such a regulatory document has many aspects that can be interpreted.

So in this short video, I might take a bit longer, just using a phone to look at the full text of the two documents and share my views from my perspective.

More importantly, for practitioners in our industry, and regarding some business practices I see in this field, can we still operate in mainland China? If we cannot, what should we do? This is what I want to discuss with everyone in this short video. The video might be a bit long, so if you are genuinely interested in this topic, I suggest you save it for later to avoid losing it.

First, we can open the topic regarding the central bank and eight ministries about the risk prevention and disposal of cryptocurrencies. This is a report from the "Daily Economic News." Here, we can look at each point to see what they want to express.

One interesting point is that at the beginning, it directly defined the attributes of tokenizing real-world assets, which is quite subtle. Those familiar with China's regulation of crypto assets know that many things have already been said too much, such as virtual currencies being equivalent to fiat currencies, and there being no legal protection, etc.

However, this should be the Chinese regulatory authorities once again qualitatively defining the tokenization of real-world assets at the beginning of an article or regulatory document. So this is quite strange; from a Web3 perspective, RWA may merely be a commercial track, and even this commercial track does not have the application globally that one might imagine.

In many instances, I have actually discussed with everyone that the current global RWA actually has different types.

The first type, represented by the US financial market, is the tokenization of traditional financial assets. The most typical example is US stocks. We now see many exchanges proposing that whether it is a fully spot exchange or a fully derivatives exchange, it allows players in the crypto asset trading platform to buy and sell a large number of US stocks in addition to trading traditional crypto assets. This is actually a relatively certain track. Because there are still many people globally who want to own assets in the US capital market, but under traditional securities accounts, they may not be able to enjoy that, so this is a relatively common track or direction, which I personally am quite optimistic about.

The second point is under the Hong Kong framework. Since the year before last, we have seen commercial service providers like Ant Group, Longxin, Xiexin, and Xunying, selling assets in Hong Kong to qualified investors or institutions. Of course, this is still limited to the primary market and has not yet formed liquidity in the secondary market.

The third point, from the perspective of financial risk prevention, is that the Chinese regulatory authorities should focus on the large number of domestic assets, domestic funds, and domestic audiences that are active in the country, issuing various tokens under the guise of NFTs, digital collectibles, or in the name of RWA. The regulatory authorities should primarily focus on this third category.

So, after the release of the regulatory documents last night, I saw many people in the RWA field in my social circle or on short video platforms starting to rally, saying they want to revive their efforts and that they have finally waited for this day. I personally think this is actually premature. Because these people or teams, the paths and methods they originally operated and managed fall into the category of illegal financial activities clearly defined in the regulatory documents.

This regulatory document placing RWA (real asset tokenization) at the forefront indicates that from the perspective of financial risk prevention, the main target is the third category of people, making their cheers even more peculiar.

Therefore, Lawyer Honglin strongly advises everyone to be cautious in conducting RWA-related activities in mainland China, whether it is: providing comprehensive business consulting, offering so-called token issuance technical solutions, conducting market promotion, or directly selling products to end users. This carries significant risks domestically. Placing it at the beginning of the document certainly has very important value and reasons.

The second point is about departmental collaboration. I have previously discussed with everyone why there will be two qualitative documents regarding stablecoins and RWA by the end of 2025. The core lies in the need for Chinese regulatory authorities to reach a consensus in the field of crypto assets and blockchain. From a judicial practice perspective, the current legal handling of the entire crypto world is fragmented: from a civil law perspective, it belongs to personal private property and should be protected; however, the views and understandings may differ among courts and government departments in different regions. The same situation may be protected in Shanghai but not in other mainland cities. Therefore, this requires collaboration among multiple departments.

The core point of this document is that whether it is the procuratorate, the court, the Cyberspace Administration, or financial institutions, a linkage mechanism needs to be formed. This means that in cases or projects involving crypto assets and blockchain, various departments need to maintain consistent statements and steps.

Taking another document, the No. 1 document promoted by the Securities Regulatory Commission, as an example, in addition to understanding related products as part of the securities regulatory framework, it also needs to meet the requirements of the Cyberspace Administration, financial regulatory departments, and other relevant requirements, which can be seen as a cautious innovation.

Strengthening risk prevention departments also brings in China's foreign exchange management department. As we know, by the end of the year, especially after the regulatory qualitative assessment regarding stablecoins, a very important regulatory direction is actually about OTC trading. I have consistently advised some partners who previously engaged in OTC business to scale back recently. Because the current focus of domestic attention on cryptocurrencies has shifted from the original "issuing tokens and ICOs for fundraising" to a slight adjustment in wording to "preventing fundraising through RWA." This is actually a key point regarding illegal fundraising and financial risk prevention.

Additionally, one of the main concerns of regulatory authorities is the issue of capital outflow. Some previous methods may face restrictions, leading many partners to hope to transfer funds across borders through stablecoins like USDT. From the perspective of regulatory authorities, this is also a key direction to focus on.

Moreover, we have learned that since last year, there have been related projects or research directions aiming to track on-chain, combined with the direction of interbank capital flow off-chain, to conduct big data screening and focus, thereby locking in the paths of related capital outflows.

Therefore, we have always conservatively believed that mainland China will not open up to cryptocurrencies. A crucial point is the issue of capital management systems, which should be a key focus for everyone in the current industry.

From this perspective, whether it is a narrow understanding of being an OTC trader, or having related business needs to facilitate and match, or online through some exchanges to lead orders or rebates, allowing netizens to purchase crypto assets through your channel and then transfer them out or use them for other purposes, the risks are too high for you, and we strongly advise against it.

At the same time, we also see some restrictions on intermediaries or related service groups. I think this is also quite business-oriented because the reason this regulatory document is so detailed actually stems from attention and description of many micro scenarios in the current industry. For example, it even mentions: virtual currencies and related financial products must not be included as collateral or pledge; insurance business related to virtual currencies must not be conducted, etc.

I don't know how everyone interprets this statement. Because we know that some friends in the OTC market have changed their wording, saying, "I am lending you money, but will use cryptocurrency as collateral." I wonder if everyone can understand this meaning.

In traditional buying and selling processes, it is a direct exchange of money for goods, which belongs to the buying and selling of crypto assets. But now some friends have learned to be "clever," and they may want to make an adjustment: "I am lending you money, a pure lending relationship, but I am worried about your performance risk. Just so happens you have some economically valuable crypto assets, so you provide those crypto assets as collateral through pledging, etc. I am not helping you complete the exchange between crypto assets and fiat currency; I am actually in a lending relationship." This is a very subtle scenario.

But can you imagine? In such a regulatory document, such descriptions are directly included. So from this perspective, we can somewhat understand that regulatory authorities are now quite familiar with the entire cryptocurrency industry, especially some methods or tricks in the mainland. Of course, conversely, it is also because there should be many internal people or partners in the circle who, when facing regulatory authorities, describe and explain many business details. So everyone should not think that they are being clever and that the relevant departments do not understand or see these methods; this is actually quite unlikely.

I believe this document indeed has many points that can be slowly discussed and studied, which is why I will use a relatively long short video to talk about this matter.

The seventh point is "Strengthening the management of internet information content and access." This should be understandable to everyone because currently, on many short video media platforms, such as certain books, certain sounds, video accounts, etc., we see many foreign exchanges or project parties using a large number of "disguised" accounts for promotion, even including recruitment. The platforms will also tighten some sensitive word restrictions regularly based on the requirements of the Cyberspace Administration and control related accounts. Regulatory authorities have actually noticed this trend, so the regulatory requirements for such internet platforms are becoming increasingly stringent. When it comes to law enforcement collaboration, relevant internet platforms or content platforms also need to cooperate.

The eighth point is "Strengthening the registration and advertising management of operating entities." Here, I can share two details with everyone.

The first detail is about Horgos in Xinjiang. There is a free trade zone there. From what I understand, in the past two years, when the local management committee issued business licenses to some enterprises in the area, their business scope included "judicial disposal of cryptocurrencies."

Therefore, such regulations or documents are specifically aimed at these details. Many free trade zones may believe they can conduct some financial innovation pilot projects within their areas. However, this document actually gives a direct negative attitude.

Another small detail is that we know there was a financial product related to cryptocurrency investment on a certain platform last year. Of course, it was sold out on the same day and then taken down. That financial product was essentially an external investment fund product. If I remember correctly, about 10% of the fund's investment direction was directed towards Bitcoin ETFs and some crypto asset concept stocks, such as shares of Coinbase. So strictly speaking, it is not what we understand as a cryptocurrency fund product. However, advertisements for external investments in related assets through such multi-layered nesting will also be restricted by regulatory authorities. Therefore, it was also taken down and could not be advertised or promoted.

The ninth point is about rectifying cryptocurrency mining activities. A key point to pay special attention to is that, in addition to the emphasis since 2021 that any discovered cryptocurrency mining activities in mainland China must be shut down, and no new activities can be initiated.

This is actually a response to the signs of a resurgence in cryptocurrency mining activities in mainland China over the past year. We know that at one time, Bitcoin mining power in mainland China accounted for 70% of the global total, with very high output. However, after 2021, theoretically, all cryptocurrency mining in China has gone overseas.

However, according to Lawyer Honglin's observations over the past two years, from the statistical perspective of Bitcoin mining, China still has at least over 20% of the mining power. In the past six months, I have seen many people directly selling mining machines and even providing mining machine hosting services on news media, such as certain platforms and my WeChat moments.

Of course, these activities are often hidden quite deeply, such as being concealed in many cloud computing centers and computing power centers. Some may be more blatant, thinking that the current attitude of the state in this area has softened. But in reality, this serves as a clear and reiterated statement: mining cannot be conducted.

Another point I believe everyone should pay special attention to is: it is strictly forbidden for mining machine manufacturing companies to provide services such as selling mining machines within the country. This essentially means that mining cannot be conducted, and selling mining machines in mainland China is also prohibited. I often see some people selling mining machines in my social circle.

This means that in the future, mining machines can only be exported and cannot be sold in mainland China. This is particularly important for those selling mining machines, hardware, or those promoting so-called "nodes" or "servers" under the guise of "DePin" in their social circles. Because there may be a misconception that as long as they are not selling Bitcoin mining machines, selling mining machines for some other altcoins is acceptable. However, regulatory authorities have also recognized this and are advising against such gray area activities.

Later, it is mentioned that illegal financial activities, if suspected of criminal offenses, will be handed over to public security, which we will not elaborate on. Strengthening industry self-discipline is also something we will not discuss further.

Moving on to the fourth part, which is the key content we want to discuss, is about RWA, etc. In such documents, it is clearly defined: if you are a domestic entity wanting to conduct related activities in mainland China under the name of RWA, this is not allowed. If you are a domestic company or project wanting to directly issue related RW tokens overseas, this is also not allowed.

However, there is actually a small loophole: if you have obtained the relevant regulatory authorities' approval or consent, you can then conduct related operations overseas. This actually echoes the Securities Regulatory Commission's document No. 1 for 2026 this year. This document states that if a domestic entity or project wants to issue RWA products overseas, first, you must file with the domestic Securities Regulatory Commission. Although it is not an approval process, I believe its strength may be slightly weaker than that of an approval, but the thresholds and requirements are still relatively high.

The second point is that if you want to issue RWA products overseas, you must seek the overseas subsidiaries or branches of domestic financial institutions. At the same time, there will be requirements for some business details, but I understand that it is basically the same logic and standards as overseas bond issuance.

So, these points clarify the boundaries of what can and cannot be done in the RWA field as understood in the Web3 industry.

The points that cannot be done are: if it is a domestic asset, you cannot directly issue related tokens within the country; if it is a domestic asset, when you want to conduct RWA token issuance overseas, you cannot target the Chinese mainland public; even if your project and assets are overseas, you cannot sell them to residents of mainland China.

The points that can be done are: you can, after filing with the Securities Regulatory Commission in China, then seek the overseas subsidiaries or branches of domestic financial institutions to provide related issuance services. Moreover, all information during the product and project operation process must be promptly synchronized with the regulatory authorities.

This is what we see regarding what can and cannot be done in the RWA area. Therefore, in the Securities Regulatory Commission's document No. 1, it also describes some negative lists (i.e., what cannot be done, which companies cannot operate, which individuals cannot engage). Although it does not use the term "RWA" in its wording and expression, I understand this is actually a cautious innovation.

This morning, relevant journalists interviewed me to discuss my views on this matter. I believe that under the current circumstances, if China wants to solve the problem of high-quality assets in mainland China, or if the country wants to focus on encouraging development directions, this can be supported through securities tokenization: on one hand, it can support Hong Kong's financial innovation and industrial application in Web3. On the other hand, it can also be seen as a cautious financial innovation under the Securities Regulatory Commission (securities regulation).

It may be a long distance and gap from the level that partners in our industry want to achieve. This is basically not something for small players or startup teams. Therefore, I believe that some of the things Ant Group did previously should be coordinated with the Securities Regulatory Commission, and they may be among the first in the country to apply and implement in this direction.

Thus, I believe that either large internet companies with sufficient scale and financial technology attributes can undertake this, or some domestic listed companies may take out a portion of their projects to conduct a pilot. The initial compliance processes and costs are actually very high.

So I think if everyone is thinking about RWA, it might be better to wait a bit longer, perhaps half a year or a year, to see how things develop.

Finally, regarding legal responsibilities, this also responds to many partners' concerns after the release of this news. One point is that for individual players, if they want to invest in related crypto assets or related financial products, what legal risks do they face? This viewpoint is actually not innovative; it remains the same: civil actions are invalid. The risks are borne by the individual.

There is also a point that those suspected of disrupting financial order and endangering financial security will be investigated and dealt with by relevant departments. There is a slightly subtle point here: "financial order" actually includes systems like foreign exchange management. This means that if you personally buy coins purely for personal cross-border use, then in such cases, if discovered, there will still be significant legal risks. This should be understandable, and we will just touch on it briefly.

In addition to individual players, we also know that a large number of KOLs and many Chinese-speaking operational partners are actually active in mainland China. Because some friends have told me that currently, 40% of the global trading volume of crypto assets is also in mainland China. The exchanges that we see every day talking about compliance, apart from those two in Hong Kong, are actually mostly conducting business face-to-face, which people call "selective compliance": on one hand, applying for licenses overseas, while on the other hand, still engaging in such activities in China. We will not judge this for now, but I want to emphasize to KOLs providing traffic and promotional services for these institutions, or partners involved in content promotion and traffic generation, that they should pay attention moving forward.

Recently, I mentioned at an event that many partners feel that posting related referral links on foreign media like X (formerly Twitter) for users to register and receive commissions is not a big deal. However, the reality is that the related content and information we publish on foreign media will be monitored, and everyone should understand the meaning of this statement.

Therefore, for those of us in mainland China, whether through events or links, helping some non-compliant foreign exchanges (where "compliance" is also a gray area term) to generate customer traffic, if it is for some core large platforms, it may just be a matter of probability and luck; if it is for smaller platforms, where people are attracted by high commissions to promote extensively, if during subsequent law enforcement processes, that platform is deemed to be operating illegally, or even involves some gambling-related content, the criminal risks for the traffic generators will also be very high.

Thus, in terms of legal responsibilities, in addition to focusing on individual holdings and investments, we also need to pay special attention to partners who provide traffic and promotional services for these trading institutions or OTC traders, which is something we particularly need to focus on.

In summary, I have spent nearly half an hour discussing this regulatory document with everyone, along with my personal views in conjunction with the Securities Regulatory Commission's document No. 1. Of course, I did not prepare a related written script specifically, so my expression may not be very precise, but I believe the core viewpoints and meanings have been conveyed.

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。