AI: Chinese espionage agency warns of danger, crypto already in its sights

An intelligence service, now a regular commentator on WeChat. The Chinese Ministry of State Security (MSS), the country's main espionage and counter-espionage agency, warns that the accelerated advancements in artificial intelligence could backfire on China: leaks of sensitive data, manipulation of models, and tailored influence operations.

The warning comes from a country that claims a global podium in AI and has made its open models an instrument of influence. Massively disseminating a technology while locking down its uses is a balancing act.

Key Points

• The MSS, China's main intelligence agency, describes AI as a vector for data leaks and influence operations.
• Anti-espionage law expanded in 2023, mandatory labeling of AI-generated content starting September 2025: the legal arsenal is tightening.
• Beijing applies to models the doctrine tested on cryptos, between banning open networks and promoting traceable digital yuan.
• According to several analyses, China still holds 194,000 BTC from the PlusToken seizure, a point now contested.

AI, the new front of Chinese national security

Since 2023, the Ministry of State Security has been regularly publishing educational posts on WeChat, a rare exercise for an administration accustomed to discretion. The themes loop: mapping data, connected objects, electric vehicles, weather stations, and now language models. The scenarios described return to the same fears: officials feeding chatbots with internal documents, or cloned voices serving social engineering. Another risk documented by the MSS: poisoned datasets before model training.

The legal arsenal has followed suit. The revised anti-espionage law in 2023 expanded the notion of state secret to any document or data related to national security, a broad formulation that encompasses training datasets. Provisional measures on generative AI regulate public services, and mandatory labeling of AI-produced content applies from September 2025.

The official doctrine can be summarized in three adjectives. Before the Politburo gathered in April 2025 for a study session dedicated to artificial intelligence, Xi Jinping set the course.

<< Artificial intelligence must be safe, reliable, and controllable. >>

Xi Jinping, President of the People's Republic of China

Three months earlier, the release of DeepSeek's R1 model had caused American tech stocks to plummet, with nearly $600 billion in market capitalization evaporated in one session for Nvidia alone. The Chinese state apparatus celebrates this industrial breakthrough while simultaneously describing the models as a dream entry point for adversarial services.

Crypto: the same mistrust, from banned bitcoin to digital yuan

This lens of interpretation, Beijing has honed on cryptocurrencies. In September 2021, ten administrations led by the central bank declared all activities related to digital assets illegal, from trading to mining. Bitcoin has not left the country, however, as over-the-counter trading has simply shifted into the discretion of private messaging.

The official alternative has a name: digital yuan. Its international operations center opened in Shanghai in 2025, with the ambition of internationalizing a programmable and traceable currency down to the cent. In Hong Kong, the licensing regime for stablecoin issuers came into effect on August 1, 2025, before the mainland authorities asked brokers to freeze their work on tokenizing real assets and tech giants their stablecoin projects.

The lockdown works as long as value circulates on administered pipes. It crumbles as soon as it migrates to infrastructures that no one operates: decentralized computing markets like Bittensor or Render and self-hosted wallets. An open-source model redistributed outside any jurisdiction escapes just as much. A model published under a permissive license escapes its author from the first download, and this is exactly the risk pointed out by the MSS.

The paradox can be quantified. Banned from trading since 2021, China still claims to hold around 194,000 bitcoins seized in the PlusToken case, one of the largest BTC treasures ever amassed by a state, even though several on-chain analysts estimate that this stock may have already been liquidated as early as 2019. Open networks remain banned, but the exact fate of these tokens continues to divide.

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