In summary:
Numerous countries, including Taiwan, Italy, India, Australia, and South Korea, have banned DeepSeek due to security and privacy concerns.
The bans impact the crypto market as projects integrating DeepSeek may face restrictions, but open-source AI models continue to proliferate.
The bans could backfire and fuel DeepSeek’s growth, similar to how Bitcoin thrived despite attempts to control it.
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The Chinese-developed large language model DeepSeek is facing widespread bans. After less than a month of “taking the world by storm,” many regulators globally are now raising concerns about security and privacy issues.
Many previous predictions about DeepSeek’s positive impact are showing signs of reversal. How could the crypto market be affected? Here are some observations from BeInCrypto.
Why is DeepSeek Being Shunned?
DeepSeek’s emergence initially caused apprehension among US crypto and stock market investors, shaking OpenAI’s monopoly. But now, a series of countries have taken steps to ban DeepSeek.
Recently, Taiwan banned government agencies, public sector employees, and any critical infrastructure providers from using DeepSeek R1. Italy has also issued a complete ban on DeepSeek, preventing the AI from processing any data from its citizens. DeepSeek has disappeared from the App Store and Google Play in Italy.
Other countries like India, Australia, and South Korea have also banned DeepSeek for government employees. Similar proposals have emerged in countries like Ireland, Belgium, and France. In the US, NASA, on Feb. 1, became the latest federal agency to ban employee access to DeepSeek. The UK has not banned the app, but the UK’s AI minister, Feryal Clark, has cautioned citizens about its use.
This is gradually becoming a genuine global wave. The most common reason for the bans is concern about national security and privacy.
“Western governments are concerned that user data collected by Chinese platforms could be used for espionage, conducting influence operations, or surveillance. Whether this actually happens is debatable, but the mere possibility is enough to justify the bans from a national security perspective,” said researcher Eddy Borges-Rey from Northwestern University in Qatar.
How Could the DeepSeek Ban Affect the Crypto Market?
When DeepSeek announced its new model surpassing ChatGPT, a slew of crypto projects quickly jumped on the bandwagon and announced their integration of DeepSeek. Examples include Venice, Sora Labs, MyShell, Intent Kit, Regent, AlphaArc, Build fun, Autonome, Eliza, Hyperbolic, Eternal AI, and LayerAI.
Currently, the DeepSeek ban could affect projects in countries where it is enforced. However, the extent of the impact depends on the specific restrictions. DeepSeek V3 is an open-source AI model that anyone can use. Therefore, banning open-source code is not easy.
Data from Hugging Face shows that in just over two weeks since its announcement on Dec. 25, 2025, DeepSeek V3 has been downloaded over 1 million times. This number led Ignis Rex to question whether the government (the US) could possibly check every citizen’s computer for the DeepSeek code.
“They don’t understand open source… DeepSeek is not a centralized server they can shut down. It has been downloaded, forked, and spread too quickly… Governments banning DeepSeek are fighting the wrong battle. Instead of facing the inevitable shift towards decentralization, they are clinging to outdated forms of control… Every ban only draws more attention to DeepSeek,” commented X user light up or leave
Community discussions reveal that many remain optimistic despite the bans. Some even argue that the bans could fuel DeepSeek’s growth, similar to how Bitcoin thrived under adversity.
“Bans will drive things underground, giving them a new wildness, making them grow faster and harder to detect. Bitcoin (BTC) is a prime example. A currency banned through ‘Operation Choke Point,’ smeared by mainstream media, with software developers like Roman Storm and Ross Ulbricht arrested and barred from the banking system. Bottom line: Banning open-source AI will drive creators to spaces where they can thrive, like Crypto/Web3,” commented investor TonyBet.
See more: AI Agent Sector Facing Mounting Challenges: Is it Over?
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