China’s Ministry of State Security has called cryptocurrency anonymity an “illusion,” warning that digital payments can leave trails linking wallets to real people.
The agency described anonymity as a “false proposition” in a September 28 statement, according to reporting on its announcement. It said blockchain records, exchange activity, device information and IP addresses can help investigators identify users.
A wallet address does not guarantee anonymity
The ministry’s argument centres on the difference between a visible transaction and an identified person. A wallet address may not display its owner’s name, but transactions can provide a trail that investigators combine with other information.
The agency pointed to conversions between crypto and traditional money as opportunities to connect that trail to an identity. Its warning does not establish that every wallet can automatically be identified.
Beijing links crypto to espionage
The ministry also described crypto as an “accomplice” in espionage, alongside its alleged use in money laundering and cyberattacks.
The statement reinforces Beijing’s restrictive approach to cryptocurrencies, presenting them as a national-security concern as well as a financial risk.
Related: China Formalizes Ban on Yuan Stablecoins and RWA Tokenization.
