China Bans Crypto Fundraising, Violators Face Prison

According to a new legal statement from the Supreme People’s Court of China, fundraising for crypto in the country is considered an illegal activity, according to the South China Morning Post.SCMP).

The new ban helps tighten regulation aimed at financial fraud in a country that has become known over the years for its crackdown on cryptocurrencies.

Imprisonment

The consequences of crypto fundraising depend on the value of the funds raised, according to the Supreme People’s Court interpretation released on Thursday.

The change, which came into effect on March 1, provides that Chinese courts can now formally sentence criminals to terms of imprisonment ranging from less than three years to more than 10 years.

The court classified the 100,000 yuan (US$15,800) fundraiser as a “large amount.”

If the fundraiser is an “extremely large” amount of 50 million yuan, the damage is at least 25 million yuan, or involves 5,000 people classified as “extremely serious” — potentially resulting in prison sentences of more than a decade.

The new interpretation of the law aims to “punish criminals who illegally collect funds in accordance with the law and to maintain national financial stability and security” and is consistent with Beijing’s active efforts to eradicate cryptocurrency in the country – she in the category categorize financial fraud and money laundering.

Nothing too surprising

Last September, China’s central bank, the People’s Bank of China (PBoC), released a memorandum of understanding criminalizing all crypto activities – from trading to mining.

Though Beijing began cracking down on cryptocurrencies years ago, last summer’s mining ban in China led to Bitcoin’s biggest drop in mining difficulty, down nearly 28% in July, as miners began moving their operations out of the country .

The mining ban saw the Bitcoin hashrate drop by almost 50%, but the computing power that secured the network recovered in the months that followed.

Bitcoin network hash rate chart 12 months | Source: blockchain.com

As a result, the United States now accounts for more than 35% of the Bitcoin network’s hashrate, according to the Cambridge Bitcoin Electricity Consumption Index.

Bitcoin posted a new all-time high hashrate of 248.1 exahashes per second (EH/s) earlier this month — becoming increasingly resilient to cyberattacks.

Join CoinCu Telegram to keep track of news: https://t.me/coincunews

Follow CoinCu Youtube Channel | Follow CoinCu Facebook page