China Declares RWA Activities Illegal in Joint Financial Risk Warning

TLDR

• China has formally classified all real-world asset (RWA) tokenization as illegal under current financial laws.
• Authorities confirmed that no RWA-related activities have been approved by any Chinese financial regulator.
• The joint risk warning applies liability to both domestic actors and staff of offshore RWA service providers.
• RWA is equated with illegal fundraising, unauthorized securities issuance, and illegal futures operations.
• The document states RWA poses uncontrollable financial risks, dismissing arguments based on compliance or technology.

Chinese financial authorities have formally classified real-world asset tokenization as illegal financial activity. A joint risk warning issued by seven major financial industry associations confirmed the unified stance. The notice places RWA alongside banned virtual currency practices under existing financial laws.

Regulators Explicitly Define RWA as Illegal Financial Activity

The joint document was co-signed by associations covering banking, securities, futures, payments, asset management, and listed companies. It states that RWA involves “financing and trading activities carried out through the issuance of tokens or similar certificates.” Regulators added that such activities pose risks, including fraudulent assets, operational failure, and speculative hype.

The notice confirms that RWA is legally treated as a fundraising and trading mechanism. This classification subjects RWA to China’s Securities Law and regulations banning illegal financial business. Any token issuance, trading arrangement, or yield distribution now falls within prohibited activity.

Regulators further stated, “At present, no real-world asset tokenization activities have been approved by China’s financial regulatory authorities.” This declaration removes any assumption of pilot programs or pending approvals. All RWA projects currently operating lack legal standing within China.

Warning Extends Liability to Service Providers and Offshore Teams

The document emphasizes accountability beyond project issuers. It states, “Domestic staff of overseas virtual-currency or real-world-asset token service providers will be held legally accountable.” This applies to institutions or individuals who knowingly or should have known about such activities.

The phrase “knowingly or should have known” establishes a legal presumption rather than intent. Consultants, developers, marketers, payment processors, and promoters may face liability. Offshore registration does not shield teams operating or providing services inside mainland China.

Regulators also linked RWA to defined criminal violations. These include illegal fundraising, unauthorized securities issuance, and illegal futures business operations. The notice aligns RWA enforcement with precedents already applied in court rulings.

China Removes Any Regulatory Path for RWA Development

Authorities stated that RWA presents unacceptable financial risk regardless of technical structure. The notice contains no reference to technical pilots or conditional compliance frameworks. Regulators framed the issue as financial risk, not technological uncertainty.

The warning dismantles arguments based on asset backing, smart contracts, or offshore structuring. Any model involving financing and trading is treated as illegal. Projects recruiting participants or partners inside China fall directly under the enforcement scope. The document also rejects claims of temporary restriction. China now explicitly excludes RWA from its legal financial system. This clarification marks the most comprehensive rejection of RWA activities to date.

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