China's draft Financial Law proposes comprehensive regulation of financial activities, categorizing virtual currency transactions, issuance, and promotion as illegal financial activities. The law targets unauthorized financial marketing, potentially freezing OTC funds, and imposes restrictions on overseas token issuance under stringent regulatory scrutiny. Domestic projects face legal challenges with token issuance deemed illegal, and real controllers may be held accountable. The law enhances regulatory pathways from administrative to criminal enforcement, significantly increasing risks for the cryptocurrency sector in China.