Having been involved in the crypto world for these years, I’ve seen all kinds of myths and tragedies. The biggest risk isn’t losing money, but falling into traps—especially those that are legally problematic. Today, I’ll straightforwardly talk about what you can and cannot do when holding and trading virtual currencies here.

**Personal holdings are legally safe**

Many people think that digital assets are completely banned domestically, but in fact, the central bank and relevant authorities have already clarified their stance. Bitcoin and similar assets are classified as "special virtual commodities," not legal tender, and no one can use them directly to buy a house or a car. But the key point is—holding them personally is not illegal. It’s okay if you mine, receive airdrops, or get coins from friends. Buying on overseas platforms with your own money is also fine, as long as the source of funds is legitimate. Simply put, it’s like collecting art—this is your asset.

**Private transactions are a trap**

This is the easiest way to get into trouble in practice. Two people directly trading virtual currencies via WeChat or QQ may seem convenient, but the risks are extremely high. If the other party takes your money and then blocks you? Reporting to the police might not even lead to a case. Courts may also rule that the transaction itself is invalid, and you’ll have to bear the loss yourself. In 2023, there have been cases like this—investors lost money in trading and wanted to back out, suing the other party for a refund, only to be dismissed by the court. The reality is: the law does not protect such transactions, and if something goes wrong, you’re on your own.

**Platform operations are strictly forbidden**

This is the real red line. Setting up a virtual currency trading platform domestically, engaging in coin-to-coin trading matching, or providing leveraged trading services—these are all illegal. Some small platforms claim to offer trading, but in reality, they are just gambling schemes, and losses cannot be recovered. If you participate in operating or promoting such platforms, the risks can even lead to criminal penalties.