China’s Supreme Court Rules Crypto Fundraising Illegal

key ideas

  • China’s Supreme Court Can Now Impose Jail Sentences Against People Raising Public Funds Through Crypto
  • This decision adds fuel to the fire already lit in the cryptocurrency and financial markets
  • Jail and sentencing would vary depending on the intensity of the offense and the money involved

Putin’s “special military operation” has caused a significant financial rally in different financial markets around the world. The crypto market has also not been spared the bloodbath as the global market cryptocurrency the market cap slipped to $1.5 trillion.

To add to the global tension, the Chinese Supreme Court ruled that virtual asset transactions constitute “unlawful fundraising”. Thus, further paving the way for tighter crypto laws in the country.

Add gasoline to the fire

China’s Supreme announced its powers to imprison those found guilty of raising funds through token sales, expanding its crypto crackdown. In mainly sensitive market conditions such as Apple, Microsoftand other Big Tech stocks led the market sell-off, as China’s move to come down hard on crypto added fuel to the fire.

The effects of the Russian military operation were also observed on the main indices, such as Nasdaq 100 the index plunged more than 20% for the first time in nearly two years.

According to the released statement, China’s top court changed its interpretation of its criminal law to raise public funds through “illegal virtual currency”. The amendment comes into force on March 1, 2022.

The decision further stated that the suspects would be prosecuted under Article 176 of China’s criminal law, which carries prison terms of between three and 10 years and fines of between $7,900 (50,000 RMB) and $79,000 ( 500,000 RMB) for crimes involving large sums of money.

According to the criminal law, less serious offenses will be subject to less than three years in prison and fines ranging from $3,160 (20,000 RMB) to $31,600 (200,000 RMB).

China’s struggle with crypto continues

Interestingly, while China had banned crypto-based fundraising in 2017, the new amendment allows Chinese courts to officially impose sentences on criminals. That said, prison terms for said crimes would vary depending on the intensity of the offense and the money involved in the crime.

Notably, the People’s Bank of China and several other leading agencies had declared crypto transactions to be illegal fundraising in September 2021. Thursday’s court ruling officially designates them as crimes, determining corresponding penalties.

In May 2021, China’s State Council ordered a crackdown on crypto mining and trading that led to the migration of a dozen crypto mining companies and crypto organizations. The same also led to the fall of the crypto market in May when BTC fell to $30,000, and Ethereum the price dipped to a low of $1750.

This article was originally published on FX Empire

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