China bans fundraising using cryptocurrencies

The Supreme Court of China has ruled that it will make any collection of funds in digital currencies illegal, equating these transactions with fraud.

The new rules are formulated in the “Decision to Amend the Interpretation of the Supreme People’s Court on a Number of Matters Concerning the Specific Application of the Law in Criminal Trial of Illegal Fundraising”. The law added three more financial instruments to the four types of illegal activities:

“Illicit development of funds through online lending, investing in shares, transactions with virtual currency.”

The legislation has also been amended to increase penalties for crimes related to illegal fundraising:

“A person who commits a fundraising fraud offense shall be punished by imprisonment for a term of three to seven years and a fine of at least 100,000 yuan (more than $15,000) but not more than 5 million yuan (more than $700,000). ); if he is sentenced to imprisonment for a fixed term of at least seven years or life imprisonment, and to a fine of at least 500,000 yuan (about $80,000) or more, or confiscation of property.”

The inclusion of crypto-currency transactions in the new revised judicial interpretation of the law will mean that those found to be illegally raising funds with crypto-currencies will be punished in accordance with the recently revised law. The new rule will come into force on March 1, 2022.

The Chinese government is now trying to include cryptocurrencies in all criminal activity laws. The Chinese province of Zhejiang announced an increase in fines for mining cryptocurrencies, tightening the punishment for mining in China.