It seems that the impact of Russian military attacks on Ukraine on crypto market cap is not enough, China’s Supreme Court has even added fuel to the fire by declaring that crypto fundraising is illegal in this country.

China declares crypto fundraising illegal

Cryptocurrency collecting is now a criminal offense in China, the country’s top court said in a new interpretation of the national law.

According to the published interpretation of the Supreme People’s Court, the penalty for such fundraising depends partly on the value of the money collected:

Fundraising of more than 100,000 yuan (US$15,800) is considered “large amounts of money”.

If it is an “extremely large” amount of 50 million yuan, damages of at least 25 million yuan, or 5,000 people, which is considered “extremely serious,” more than 10 years in prison can be imposed.

Fundraising under another name is also not beneficial. The court said online lending and leasing can be considered fundraising because the public’s savings can be illegally absorbed.

Just to be clear, the new bill announced on Thursday is an amendment to previous legislative documents related to cryptocurrency transactions and will go into effect on March 1st.

In this judgment, one of the changes in Section No. 8 of Article 2 defines “illegal fundraising through online lending, investing in stocks and trading in virtual currencies”.

China’s Supreme Court has decided to step up efforts to eliminate cryptocurrencies. Similarly, a change in the law gives authorities the power to keep records and fine violators.

China’s crypto crackdown is not new

Beijing has taken a firm stance against cryptocurrency trading and mining. In 2013, the government banned Chinese banks from trading Bitcoin, which was selling for less than $1,000 at the time, a fraction of its nearly $40,000 value today.

The Chinese government also banned all forms of fundraising through digital token issuance — known as initial coin offerings — in 2017, forcing many crypto investors to invest overseas in China.

In May 2021, the Financial Stability and Development Committee of the State Council, the nation’s cabinet, said it would “suppress bitcoin mining and trading and resolutely prevent its transmission.” individual risk to society”.

Previous court rulings have shown a consistent stance against cryptocurrencies. Late last year, a Beijing court ruled that Bitcoin mining contracts were invalid, showing the judicial system has no intention of recognizing and protecting cryptocurrency-related interests.

In September 2021, the People’s Bank of China and other key authorities also said that cryptocurrency transactions were illegal fundraising. While the latest ruling made it a crime, handing out penalties and jail terms for those accused of illegally raising funds.

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