Rules Supreme Court to all cryptocurrencies and related transactions are illegal in China
Updated: May 30, 2022
What is Better Than a Virtual Currency Lawyer? A Whole Team of Currency Scams Experts. Cryptocurrencies are extremely popular today and their transactions now fall under criminal law, as indicated by the verdict of the Supreme Court of China. This verdict could essentially mean that any individual, company, or stock exchange caught in buying, selling, trading, or holding cryptocurrency tokens and raising funds through the media could be tried in court as a criminal.
In the first verdict of this kind, cryptocurrency transactions will be covered by the criminal law in China. The decision was expected to follow a sharp crackdown on the rapid growth of mining and the trade-in of virtual money. China has already banned cryptocurrency mining, and law enforcement agencies in that country are hunting for illegal activities in the crypto space.
Under the new legislature, suspects will be prosecuted under Article 176 of China's Criminal Law. If convicted, criminals could face prison sentences between 3 to 10 years and fines between RMB 50,000 ($7,900) and RMB 500,000 ($79,000). A lengthy prison sentence, as well as a hefty fine, would be levied for “crimes involving large sums of money”. For crimes where the amount is small or the crime is “less serious”, criminals could receive a jail term of up to 3 years and a fine ranging from RMB 20,000 ($3,160) to RMB 200,000 ($31,600).
Technically speaking, China has banned any attempts to raise funds using cryptocurrencies. Moreover, online lending and financial leases considered to be fundraising, aren't allowed. With the latest ruling, the judicial system has made it amply clear that the country has no intention of recognizing and protecting cryptocurrency-related interests.
The wording of the ruling appears quite broad, and hence, could have a far-reaching impact on the cryptocurrency market. The legislation refers to "cryptocurrency transactions". As every movement associated with cryptocurrencies is essentially a transaction, law enforcement could prosecute anyone associated with cryptocurrencies.
It is important to note that China has its own cryptocurrency, called the “Digital Yuan”. The country is safeguarding this virtual currency. It appears China is swiftly moving to regulate and constrain crypto usage. The country presumably wants to maintain central command, authority, ownership, and monitoring rights over cryptocurrencies. Needless to add, major cryptocurrencies such as Bitcoin, Ethereum, and so on, rely on anonymized, decentralized ledgers specifically to stay away from government control and oversight.
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