cryptorisk

In a major regulatory move, China has officially declared tokenized real-world assets (RWA) illegal under its current financial legislation. A joint risk warning issued by seven major financial associations classifies RWA as a prohibited virtual currency activity, alongside stablecoins and other unauthorized digital assets. The announcement signals a strict legal crackdown on any RWA-related operations, both domestic and offshore.

Seven Financial Associations Label RWA as Unlawful
The joint statement—signed by key institutions including the Internet Finance Association, Securities Association, and the Payments & Clearing Association—emphasizes that no RWA project is authorized under Chinese law and deems the model high-risk.
RWA was defined as the issuance of tokens or debt-like certificates backed by physical assets, used for fundraising or trading purposes. The regulators warned of risks including fraud, operational failures, and excessive speculation, which compliance mechanisms cannot fully eliminate.
"No RWA activities have been approved by Chinese regulators," the statement stressed.
This is not a temporary measure or a regulatory gray area. The document ruled out any future licensing or sandboxing for RWA models, treating them as violations of the Securities Law and financial restrictions already in place.

Legal Risks for Token Issuers and Service Providers
Authorities made it clear that not only issuers, but also infrastructure providers, consultants, developers, marketers, auditors, payment processors, and even KOLs promoting RWA are legally liable.
The three primary legal violations associated with RWA are:
🔹 Illegal fundraising

🔹 Unauthorized issuance of securities

🔹 Unlawful futures trading
Even token issuance outside China will not escape liability if it involves any mainland-based operation or employee. Anyone enabling RWA distribution or marketing, even unknowingly, could face prosecution.

Offshore Entities Not Exempt If Linked to Mainland
One key highlight is the crackdown on offshore entities that operate from within mainland China. Regulators warned that even a single domestic employee supporting an RWA project could constitute a legal risk.
"Technical infrastructure providers are not exempt from legal responsibility," the document stated.
This ends the common Web3 strategy of registering entities abroad while deploying teams or services from within China.
All WeChat, Telegram, and other promotion channels are included under the enforcement scope, and any Chinese national involved in promoting RWA is now subject to legal consequences.

No Regulatory Sandbox, No Future for RWA in China
The statement leaves no room for gradual compliance or future experimentation. It makes no mention of sandbox frameworks, pilot programs, or conditional approvals.
Instead, it declares that the risks of RWA outweigh any technological benefit and aligns tokenization with previously banned crypto activities like ICOs.
Projects still promoting RWA partnerships or ambassador programs now fall under the definition of illegal operations. Regulators stress that participation in social media groups or community fundraising efforts is prosecutable.

Final Message: Technology Is Not a Legal Shield
Regulators close with a strong warning: technical complexity or structural transparency is not a legal excuse. As long as tokenization remains the core model, any such project is illegal under Chinese law.
This signals the final regulatory verdict: RWA has no viable future in China. Government policy will prioritize risk mitigation over innovation—shutting down the door on tokenized real-world assets entirely.

#RWA , #china , #Tokenization , #CryptoRisk , #BTC

Stay one step ahead – follow our profile and stay informed about everything important in the world of cryptocurrencies!
Notice:
,,The information and views presented in this article are intended solely for educational purposes and should not be taken as investment advice in any situation. The content of these pages should not be regarded as financial, investment, or any other form of advice. We caution that investing in cryptocurrencies can be risky and may lead to financial losses.“