The invention discloses an electronic device capable of preventing piracy and an anti-piracy method thereof. The electronic device comprises a function element, a processing unit and a storage unit which stores a credential ID, wherein the processing unit generates a random code K1 after being started and electrified, and the random code K1 is transferred to the function element; the function element encrypts the random code K1 and the encrypted credential ID by an encryption algorithm so as to generate an encrypted credential ID1; the processing unit reads the encrypted credential ID1 in the function element and decrypts the credential ID1 into a credential ID2 according to the decryption algorithm corresponding to the encryption algorithm; whether the credential ID2 is consistent with the credential ID in the storage unit is judged; and if the two are consistent, a system login order is performed. Because the pirate electronic device can not obtain the decryption algorithm, the pirate electronic device can not decrypt to log in the system even if obtaining the encrypted credential ID1, thus better protecting the electronic device.