China's Ministry of State Security Says the Anonymity of Cryptocurrency Is a False Claim Because Transaction Records Exist Across the Entire Blockchain.

China's Ministry of State Security published an article titled “Virtual Currency Crime Is Untraceable? Think Again!” on its official public account on September 28, according to BlockBeats. The article argues that the so-called anonymity of virtual currency is a false proposition and that blockchain records can support full-chain tracing of criminal activity.

Transaction Records Create a Permanent Trail

The ministry said that every virtual currency transaction, regardless of amount, time, or location, is recorded on a public ledger. Because blockchain technology uses distributed accounting, transaction data cannot be deleted or changed once it is on-chain. The apparent anonymity of wallet addresses only creates a temporary separation between an address and a real identity, the article said, rather than hiding the identity itself.

Exchange Paths Expose Identity Clues

The statement said that converting virtual currency into fiat currency, or exchanging one virtual currency for another, must pass through trading platforms and payment interfaces. Those steps can leave device codes and network IP information. Professional institutions can use on-chain data analysis and big data comparison to trace the likely users behind wallet addresses and reconstruct the movement of funds, it added.

Private Keys Leave No Safety Net

The ministry also warned that private keys held by individuals are the sole credential for controlling virtual currency. There is no loss-reporting or recovery channel for a private key. If it is lost, leaked, or stolen, the holder loses control of the assets. If private keys are held by trading platforms, users may recover account passwords through appeals, but they still face the risk that a platform can collapse or become unreachable.

Why the Warning Matters

The statement targets a promotional argument that virtual currency is anonymous and untraceable. Instead, it presents blockchain as an open record system and points to two practical issues: identity linkage through exchange access points and custody risk around private keys. For readers, the value of the warning is technical rather than investment-oriented: the visibility of transactions, the role of platforms, and control of private keys shape how traceable and manageable virtual currency holdings are.