China’s crackdown on crypto further strengthened on Thursday, as the Supreme Court ruled that crypto transactions constitute “illegal fundraising.” If found guilty, citizens would now be subjected to fines and potentially lengthy jail sentences.
Getting involved in “illegal fundraising” – the Chinese government’s phrase for a category of offenses that includes using crypto, encapsulates transactions using “the internet, the media, promotion conferences, leaflets, mobile phones information and other means to publicize it to the public.”
Per the ruling, suspects will be prosecuted under Article 176 of China’s criminal law, which stipulates prison sentences between three and 10 years and fines between RMB 50,000 (US$7,900) and RMB 500,000 ($79,000) for crimes involving large sums of money.
Less serious crimes, on the other hand, will be prosecuted with under three years of prison and RMB 20,000 ($3,160) to RMB 200,000 ($31,600) in fines, according to the criminal law. The said amendment is set to come into effect from 1 March.
Latest ruling supplements September’s crypto crackdown announcement
Here it is worth noting that when the Chinese authorities had announced that cryptocurrency banking transactions were illegal back in September last year, no fixed punishments were attached to violations.
At that time, authorities had stated that “virtual currency trading hype activities have risen, disrupting economic and financial order, breeding illegal and criminal activities such as gambling, illegal fundraising, fraud, pyramid schemes, and money laundering, seriously endangering the safety of people’s property.”
Now, the latest ruling prescribes the consequences of ‘if found guilty.’ In fact, the Chinese Supreme Court, while explaining the grounds for the firm sentences for people caught engaging in cryptocurrency, listed reasons congruent to September’s set.
Also, China had previously banned crypto fundraising in 2017 amid the global peak in Initial Coin Offerings [ICOs]. Thursday’s ruling amends the country’s laws to specify that digital currencies are included in the forms of fundraising that are illegal within China.