Is Binance Legal in China? Can Mainland Users Still Use It?

Bottom line: Binance does not hold an operating license in mainland China and does not accept new user registrations, but legacy users registered before 2017 are practically still using it. On a legal level, individuals holding and trading cryptocurrency is not illegal, but related business operations (running an exchange, issuing ICOs) are illegal. For mainland Chinese users, using Binance falls into a "legal gray area." When you need to register an account, enter through the Binance Official Website; Android users can use the Binance Official App, while Apple users should refer to the iOS Installation Guide to download.

Many people only have a partial understanding of mainland China's cryptocurrency policies. This article systematically outlines the current regulatory landscape and the actual situation for mainland users.

Timeline of Mainland China's Cryptocurrency Policies

Core Conclusions:

• Individuals: Holding and trading cryptocurrency does not constitute a crime.
• Businesses: Operating an exchange, issuing tokens, or providing brokerage services in mainland China is illegal.

Binance's Status in Mainland China

Legal Status

• Binance has no operating license in mainland China.
• Officially, it does not accept mainland Chinese KYC (Know Your Customer) verifications.
• It withdrew from mainland China after the "September 4th Announcement" in 2017.
• Accessing binance.com from a mainland Chinese IP displays "Service unavailable in your region."

Actual Usage Situation

• Some legacy users (registered before 2017) are still using it.
• New users register by using ID cards from other countries for KYC.
• The website/app is accessed by bypassing IP restrictions via technical means.
• The C2C (peer-to-peer) market still sees a massive volume of RMB (CNY) trading.

Binance's Official Stance

Binance officially states:

• It does not actively provide services to mainland Chinese users.
• Mainland users use the platform voluntarily.
• The company bears no legal responsibility for "non-compliant use."

Legal Risks Faced by Individual Users

Risk 1: Contract Disputes Are Not Legally Protected

If you have a dispute with Binance (e.g., frozen funds, withdrawal failures), Chinese courts will not accept the case—based on the characterization of related businesses in the "September 24th Notice."

Risk 2: C2C May Involve "Assisting Cybercrime"

The RMB you receive from C2C trading might be illicit funds (black money). If the upstream source involves scams, gambling, or money laundering:

• If you were unaware: Generally not considered a crime, but your bank card will be frozen.
• If you "should have known": You might be suspected of "the crime of assisting information network criminal activities" (assisting cybercrime).
• If you intentionally facilitated money laundering: Directly constitutes the crime of money laundering.

"Assisting cybercrime" is the primary legal risk faced by mainland crypto users. Court judgment standards are vague—as long as the transaction is clearly abnormal (frequent, extremely low price, late at night), you may be deemed to "have known."

Risk 3: Cross-Border Money Laundering

Large transfers to overseas accounts may be suspected of "currency exchange." Mainland China has strict foreign exchange controls, with an annual limit of $50,000 equivalent per person. Cross-border USDT transfers might be categorized as "illegal foreign exchange trading."

Risk 4: Taxation

There is no clear tax collection method for cryptocurrency income in mainland China. However, if classified as "property income":

• It would be subject to a 20% personal income tax.
• Large amounts (single transactions over 500,000 RMB) may involve tax evasion.

In practice, very few people actively report these taxes, but there have been cases where tax authorities recovered unpaid taxes.

Compliance Levels in Practical Scenarios

Scenario A: Long-term Holding of BTC / ETH

Scenario B: Short-term Trading

Scenario C: Commercial Activities

Practical Advice for Mainland Users

Tip 1: Clarify Your Identity

Position yourself as an "individual investor" rather than a "business operator." The difference:

• Investor: Holds, buys, sells, invests long-term.
• Operator: Acts as a middleman, trades for others, runs a business.

Only act as an investor; do not handle crypto business for others.

Tip 2: Avoid Large C2C Transactions

Transactions exceeding 50,000 RMB start to carry the risk of bank card freezing, and over 500,000 RMB carries criminal risks. Keeping single C2C transactions between 10,000-30,000 RMB is the safest approach.

Tip 3: Disperse Your Bank Cards

Don't use one single card repeatedly. Recommendation:

• Rotate between 5-10 different cards.
• Keep C2C transactions under 5 per card per month.
• Use cards from different banks (e.g., ICBC, CMB, CCB).

Tip 4: Keep Transaction Records

For every transaction, save:

• Binance order screenshots.
• Bank statements.
• Chat history with the counterparty.
• KYC information of the counterparty if possible.

If investigated by the police, these can prove you were a victim or unaware.

Tip 5: Keep a Low Profile

Do not flaunt your profits on social media, don't post referral links, don't organize crypto groups, and don't publicly teach people how to buy crypto. Showing off wealth + recruiting people are the easiest ways to attract unwanted attention.

Tip 6: Overseas Asset Allocation

Users with large capital (> 1,000,000 RMB) should consider:

• Opening a bank account in Hong Kong or overseas.
• Directly holding a cold wallet.
• Not relying on mainland Chinese bank cards for deposits and withdrawals.

Legal Differences Across Regions

Enforcement strictness varies by province within mainland China:

However, the "September 24th Notice" is a unified national document; local enforcement merely differs in intensity.

Hong Kong as a Compliant Exit

Hong Kong has been progressively advancing cryptocurrency regulation since 2023:

• Licensed exchanges operate legally (e.g., HashKey, OSL).
• Retail investors can participate in spot trading.
• Stablecoin regulations passed in 2024.
• Spot ETFs available from 2024/2025.

Impact on Mainland Chinese Users:

• Those with Hong Kong resident identity can legally use licensed platforms like HashKey.
• Those without a Hong Kong identity cannot be served by Hong Kong platforms.
• Binance does not have a license in Hong Kong, so Hong Kong residents cannot use binance.com either.

FAQ

Q: Is it illegal to use a VPN to access Binance?

VPNs themselves fall into a gray area in mainland China (personal use is generally not prosecuted, but commercial use is illegal). Using a VPN to access Binance is not an "independent illegal act," but it may aggravate the judgment if combined with other illicit behaviors.

Q: What should I do if called in by the police for questioning?

If you are just a "witness" involved due to a C2C transaction:

• Cooperate and provide transaction records.
• Explain the source of funds (your own money).
• If you were unaware of the illicit funds, state clearly that you did not know.

If you are categorized as a "suspect":

• Hire a lawyer immediately.
• Do not sign any documents without a lawyer present.

Q: Will Binance hand over my data to Chinese police?

Under normal circumstances, they will not voluntarily provide it. However, upon receiving formal requests for evidence (involving criminal cases), Binance may cooperate according to international practices. Therefore, your KYC information can technically be queried by police—via Interpol or formal evidence retrieval processes.

Q: Does registering on Binance leave a criminal record?

Registration itself does not constitute a "criminal record." But if you later get involved in a criminal case (like assisting cybercrime), the Binance account will be used as evidence.

Q: Can I use someone else's ID to register on Binance?

No. Binance requires real-person KYC—recording a video. Using someone else's ID + them recording a video = borrowing an account. If discovered by risk control, both accounts will be banned.

Q: Will policies open up in the future?

In the short term (2-3 years), mainland policies will not open up. Hong Kong's licensing is a compliant exit for overseas Chinese and the mainland's wealthy class, not a signal of mainland reopening.

Q: Is it legal for overseas Chinese to use Binance?

It depends on local laws. US, EU: Compliance requirements are becoming stricter, and some functions are restricted. Southeast Asia, Middle East: Relatively relaxed. Japan, South Korea: Require local licenses; some Binance functions are unavailable.

Conclusion

Binance does not hold a license in mainland China and does not accept new account openings. However, individual holding and trading of cryptocurrencies is not illegal. The main risks mainland users face are C2C involvement in assisting cybercrime, frozen bank cards, and foreign exchange controls. The core to reducing risk is to "be an investor, not an operator; do small amounts, not large amounts; seek compliance, avoid gray areas." Users with large capital should consider compliant allocation via Hong Kong or overseas bank accounts. The legal environment won't ease in the short term, but looking long-term, Hong Kong is maturing as a compliant exit.