Enforcement Comparison: Which Countries Prosecute Crypto Users Most in 2025

If you hold cryptocurrency, you might assume it’s safe anywhere-after all, it’s decentralized, right? But the truth is, your crypto isn’t safe if you live in a country that treats it like a crime. While some governments turn a blind eye or even welcome crypto, others are actively hunting down users, freezing wallets, and sending people to jail. So where are you most at risk just for owning or trading Bitcoin, Ethereum, or any other digital asset? The answer isn’t what you think.

China: The Global Leader in Crypto Prosecution

China doesn’t just regulate crypto-it erases it. Since 2017, the country has banned all cryptocurrency exchanges, initial coin offerings, and mining operations. By 2021, it shut down the last major mining farms. Today, if you’re caught trading crypto in China, you’re not just breaking a rule-you’re violating criminal law.

Chinese authorities don’t wait for complaints. They use surveillance systems, bank transaction monitoring, and blockchain analysis to track down individuals. In 2023, over 1,200 people were prosecuted for crypto-related offenses, mostly for peer-to-peer trading or running unlicensed wallets. Fines can reach hundreds of thousands of dollars, and prison sentences of up to 10 years are common for repeat offenders or those involved in large-scale transactions.

The government’s goal isn’t just to stop speculation-it’s to eliminate any alternative to the digital yuan. If you’re using crypto to move money outside the state-controlled financial system, you’re seen as a threat to national security.

Algeria and Bolivia: Total Bans, Zero Tolerance

Outside of China, Algeria and Bolivia are the only two countries with outright bans on cryptocurrency possession and use. In Algeria, the 2018 decree makes it illegal to buy, sell, hold, or even promote crypto. Violators face fines up to 5 million Algerian dinars (about $37,000) and up to five years in prison.

Bolivia’s Central Bank issued a similar ban in 2014, declaring cryptocurrencies “illegal” and warning that any transaction involving them would be considered fraudulent. The government doesn’t just target exchanges-it goes after individuals. In 2022, a Bolivian citizen was sentenced to three years in prison for using Bitcoin to pay for online services. There’s no gray area: owning crypto is a crime.

These countries don’t have the infrastructure to track blockchain transactions like China does. Instead, they rely on bank reports, cash transaction monitoring, and tips from neighbors or family members. If you’re caught using crypto, it’s often because someone reported you.

Bangladesh: Crypto as a Financial Crime

Bangladesh doesn’t have a formal law banning crypto, but its central bank and law enforcement treat it like one. Under the country’s Money Laundering Prevention Act, any crypto transaction is considered a potential act of terrorism financing or money laundering. That means even sending $10 in Bitcoin to a friend could land you in court.

In 2024, Bangladesh police raided 47 homes in Dhaka and Chittagong, seizing phones, laptops, and hard drives linked to crypto wallets. Over 80 people were arrested. The government doesn’t need proof of criminal intent-possession alone is enough to trigger prosecution. Fines range from $2,000 to $20,000, and jail time is common.

Unlike China, Bangladesh doesn’t have advanced blockchain tracking tools. Instead, they rely on bank records and telecom data to trace who’s using crypto apps like Binance or KuCoin. If your phone shows crypto wallet apps and your bank account shows unexplained transfers, you’re already on their radar.

India: Taxation as a Weapon

India doesn’t ban crypto. You can own it. But the government makes it painfully expensive to use. In 2022, it introduced a 30% tax on all crypto gains-no deductions, no offsets, no exceptions. On top of that, every single transaction, even sending crypto to your own wallet, triggers a 1% tax deducted at source (TDS).

This isn’t just about revenue. It’s enforcement by friction. If you’re trading regularly, you’re forced to report every trade to the tax department. The Income Tax Department now cross-references wallet addresses with bank statements and exchange data. In 2024, over 1.2 million Indian crypto users received notices for non-compliance. While most get fines, some are being investigated for tax evasion, which can lead to criminal charges.

The Supreme Court lifted the banking ban in 2020, but the tax regime has made crypto trading a high-risk activity. If you’re making $50,000 in gains, you owe $15,000 in taxes-and the government already knows about it.

United States: Targeting Criminals, Not Users

The U.S. doesn’t prosecute ordinary crypto users. It goes after the big players. In September 2024, the Treasury’s OFAC sanctioned Cryptex, a Russia-linked exchange that laundered over $5.88 billion in crypto tied to ransomware, darknet markets, and fraud. The State Department offered a $10 million reward for information leading to the arrest of its operator, Sergey Sergeevich Ivanov.

The U.S. focuses on money laundering, fraud, and sanctions evasion-not personal trading. If you’re buying Bitcoin on Coinbase and holding it, you’re not on their radar. But if you’re using decentralized exchanges to move funds from sanctioned entities, you’re in danger.

Operation Endgame, a joint U.S.-Dutch operation in early 2025, seized €7 million in crypto tied to a payment processor that funneled $97 million to Cryptex. The operation used Chainalysis and Tether’s blockchain data to trace the flow. The message is clear: if you’re helping criminals, you’ll be caught. If you’re just holding crypto, you’re fine.

Europe: Regulation Over Prosecution

Europe isn’t cracking down on users-it’s cracking down on exchanges. The new Anti-Money Laundering Authority (AMLA), launched in July 2025, now oversees all crypto firms across the EU. Exchanges must verify users, monitor transactions, and report suspicious activity. Failure means heavy fines or losing their license.

The EU’s Fifth Anti-Money Laundering Directive (AMLD5) requires exchanges to collect ID, track wallet addresses, and keep records for five years. But individuals? No one’s being arrested for owning Ethereum in Germany or trading Solana in France.

The goal is compliance, not punishment. If you’re using a licensed exchange, you’re protected. If you’re using an unregulated platform that doesn’t ask for ID, you’re taking a risk-but the government isn’t hunting you down. They’re hunting the platforms.

Singapore and South Korea: Rules, Not Rackets

Singapore and South Korea are two of the most crypto-friendly countries in Asia-but they’re not lax. They’ve built clear, strict rules.

Singapore’s Monetary Authority (MAS) requires all crypto firms to be licensed. Stablecoin issuers must hold 100% reserves in regulated banks. Exchanges must prove they’re secure. But users? No taxes on gains, no reporting requirements. As long as you’re not laundering money, you’re free to trade.

South Korea’s 2024 Act on Protection of Virtual Asset Users (VAUPA) forces exchanges to keep client assets separate, carry insurance, and report fraud. It’s designed to protect users-not punish them. In 2025, South Korea launched a government-backed crypto registry to track legitimate exchanges. If you’re using one of those, you’re safe.

Portugal: The Safe Haven

If you want to hold crypto without fear, Portugal is the place. No capital gains tax on personal crypto trades. No reporting requirements. No restrictions on buying or selling. The government doesn’t care what you do with your Bitcoin-as long as you’re not running an exchange or laundering money.

In 2025, Portugal became the first European country to officially recognize crypto as a legitimate asset class. While some politicians are pushing for new rules, there’s zero indication of prosecution. The country’s low tax rates and crypto-friendly policies have drawn thousands of digital nomads and investors.

Who’s Really at Risk?

The pattern is simple: authoritarian states ban and prosecute. Democratic states regulate and tax. If you live in China, Algeria, Bolivia, or Bangladesh, your crypto is a legal liability. If you live in India, you’re paying a heavy price just to trade. In the U.S., Europe, Singapore, South Korea, and Portugal, you’re mostly safe-if you follow the rules.

The real danger isn’t the blockchain. It’s the border. Your location determines your risk. A Bitcoin wallet in Singapore is a tool. In Bangladesh, it’s evidence.

What Should You Do?

If you’re in a high-risk country, don’t hide your crypto-avoid it. The penalties aren’t worth it. If you’re in a regulated country, use licensed exchanges. Keep records. Pay your taxes. Don’t use crypto to move money from sanctioned entities. That’s how people get caught.

Crypto isn’t lawless. It’s just differently regulated. The countries that prosecute users aren’t trying to stop innovation-they’re trying to control money. And if you’re in their way, you’re not a pioneer. You’re a target.