Cryptocurrency Fundraising In China Can Now Land You In Jail For Over 10 Years

After fully banning crypto in September 2021, India's neighbouring nation China has yet again taken another big step against cryptocurrency.

As per a recent ruling by China¡¯s top court last week, you can attract a hefty penalty and land in jail for over 10 years due to cryptocurrency fundraising, which is now a criminal offence in China, as per a report in South China Morning Post.

What The Court¡¯s Ruling Says

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According to the interpretation by the Supreme People¡¯s Court published last week on Thursday, penalties for such fundraising depend in part on the value of the amount raised

As per a report in CoinDesk, the court¡¯s ruling states that suspects will be prosecuted under Article 176 of China's criminal law, which stipulates prison sentences between three to ten years, besides levying fines between RMB 50,000 (US$7,900) and RMB 500,000 ($79,000) for crimes involving large sums of money.

Whereas, ¡®less serious¡¯ crimes will be prosecuted with under 3 years of prison and RMB 20,000 ($3,160) to RMB 200,000 ($31,600) in fines, as per the criminal law.

The amendment comes into effect on March 1, 2022. i.e. tomorrow.

As per a report in South China Morning Post, fundraising that exceeds 100,000 yuan (US$15,800) is categorized as a ¡®large amount¡¯. And if it involves either an ¡®extremely huge¡¯ amount of 50 million yuan, a loss of at least 25 million yuan, or involves 5,000 people, which is deemed ¡®extremely serious¡¯, it could result in more than 10 years in prison.

Moreover, fundraising by any other name is not off the hook, either.

The Court had said ¡®Online lending and financial leases considered to be fundraising could be charged with the illegal absorption of public savings.¡±

The fresh legal interpretation, scheduled to take effect next month, is aimed at ¡°punishing illegal fundraising crimes in accordance with the law and maintaining national financial security and stability¡±.

All this is part of China¡¯s efforts to completely root out financial scams and money laundering.

Previous Steps Taken By China Against Crypto

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Even before the crypto ban last year, China had been taking steps against it.

Way back in 2013, the Beijing government banned Chinese banks from dealing in Bitcoin, which sold for less than US$1,000 at the time, a fraction of today¡¯s value of nearly US$40,000.

And that¡¯s not all.

In 2017, the Chinese government had also banned all forms of raising capital through the issuance of digital tokens, referred to as initial coin offerings, thus forcing many Chinese cryptocurrency investors to park their investments overseas.

And in May 2021, the Financial Stability and Development Committee under the State Council, the nation¡¯s cabinet, said it would ¡°crackdown on bitcoin mining and trading behaviour and resolutely prevent the transfer of individual risks to society¡±.

Late last year, a Beijing court had ruled that Bitcoin mining contracts were invalid, suggesting the judicial system has no intention of recognising and protecting cryptocurrency-related interests.

If you want to know more about other countries that have banned crypto, click here.

Also Read: Countries Where Cryptocurrency Is Taxed