China criminalizes crypto fundraising, offenders will face jail sentences

TL;DR Breakdown:

• Crypto fundraising in China has now become a criminal offence.
• Offenders could be punished with jail sentences. 

After banning cryptocurrency trading and mining, China has now declared crypto fundraising acts illegal within the country, and violators are likely to face jail sentences, according to a new order from the Chinese Supreme court. 

China prohibits crypto fundraising 

According to the document issued on Thursday, the Chinese Supreme court has flagged crypto fundraising from the public as an illegal act, effective from 1st March. This comes as part of the new revisions to the interpretation of the nation’s Criminal Law, which was adopted last December. 

Violation of the new order will be punishable according to the amount involved. The Supreme court described 100,000 yuan (US$15,800) crypto fundraising as a “large amount.” However, over 50 million yuan ($7,917,029) will be deemed as “extremely huge,” and the offenders are likely to face more than ten years in jail. 

This is part of the Supreme court’s effort to check against illegal fundraising and financial scams. The new order basically drives at “punishing illegal fundraising crimes in accordance with the law and maintaining national financial security and stability.”

Chinese anti-crypto stance

China is one of the toughest regions for cryptocurrency-related operations. On several occasions, the government banned the locals from using and trading cryptocurrency. More recently, the crackdown the crypto mining impacted the cryptocurrency market and Bitcoin hashrate negatively. The Chinese government is concerned about the speculative nature and risks associated with digital currencies.

Whilst banning crypto, China has been actively preparing to launch a central bank digital currency (CBDC), the Digital Yuan.  In trial, the digital currency has exceeded $5 billion in transactions. 

Meanwhile, the government seems to have a loose stance on NFTs as several Chinese companies have been dabbling into the crypto arts space. In December, a major state media, Xinhua News corporation, announced its plan to release a set of journal images called “News Digital Collection,” Cryptopolitan reported.