Fundraising via Cryptocurrency Now Criminalised in China, Offenders Will Face Time in Jail

The Chinese Supreme People’s Court announced the development on February 24.

By Radhika Parashar | Updated: 25 February 2022 11:22 IST

Fundraising via Cryptocurrency Now Criminalised in China, Offenders Will Face Time in Jail

Photo Credit: Unsplash/ Quantitatives.io

China intends to eradicate scope for financial crimes in the country with revised laws

Highlights

The decision was announced by China’s Supreme Court
Crypto fundraisers to be punished as per amount collected
Jail time for offenders is inevitable

China has imposed a fresh ban on raising funds using “virtual currency”, deeming the activity illegal. Any person engaging in collecting money for any cause using cryptocurrency will be subject to prison sentence in China. The degree of punishment will be decided according to the amount of capital one may have collected using virtual assets, but jail time is inevitable for all rule violators. The move comes as part of China's stringent crackdown on all crypto–related activities.

The development was announced on Thursday, February 24, by the Chinese Supreme People's Court. If the amount of illegally or disguised absorption of public deposits is more than CNY 500,000 (roughly Rs. 60 lakh), or the direct economic loss caused to the depositor is more than CNY 250,000 (roughly Rs. 30 lakh), criminal responsibility shall be investigated according to law, the official statement from Chinese authorities said.

Other factors like previous criminal records, including administrative penalties for illegal fundraising within two years, will also be taken into consideration while pronouncing the punishment for people raising money via cryptocurrency.

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In recent days, instances of crypto-backed fundraisings emerged from other countries such as Ukraine and Canada as well.

China, with these revised guidelines, intends to eradicate financial crimes and punish those who engage in unlawful means of raising capital, a report by CryptoPotato said.

Feb 24th, 2022 :cn: China's Supreme Court declares #Bitcoin and #crypto fundraising illegal. pic.twitter.com/WwRopgxd7M
— Leng.crypto (@ChhounLeng) February 24, 2022

China's harsh attitude towards the crypto sector is nothing new. Last year in September, the country that once housed the largest number of crypto miners in the world imposed a blanket ban on crypto mining and trading.

China has never given a list of reasons behind its jarring approach on the crypto sector.

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Tesla chief Elon Musk had however noted last year that electricity shortages in China caused by crypto mining could be one reason.

In addition, crypto transactions are untraceable and the scope of cryptocurrencies being used to facilitate illicit activities such as money laundering, tax evasion, and terror funding have caused concerns for governments around the world for some years now.

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Further reading: China, Cryptocurrency, Crypto Fundraising

Radhika Parashar

Email Radhika

Radhika Parashar is a senior correspondent for Gadgets 360. She has been reporting on tech and telecom for the last three years now and will be focussing on writing about all things crypto. Besides this, she is a major sitcom nerd and often replies in Chandler Bing and Michael Scott references. For tips or queries you could reach out to her at RadhikaP@ndtv.com. More