China’s Supreme Court Rules Fund Raising in Crypto Illegal
Key Insights
- The Chinese Supreme Court will now be able to issue jail sentences against people who raise public funds through crypto
- The move adds fuel to the already lit fire in the cryptocurrency and financial markets
- Jail terms and sentences would vary based on the intensity of the offense and the money involved
Putin’s ‘special military operation’ caused a significant financial upturn across different financial markets across the globe. The crypto market, too, wasn’t spared from the bloodbath as the global cryptocurrency market cap slipped to as low as $1.5 trillion.
To add to the worldwide tension, China’s Supreme Court ruled that virtual asset transactions constitute ‘illegal fundraising.’ Thus, further paving the way for tightening laws around cryptos in the nation.
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Adding Fuel in Fire
China’s supreme announced powers to jail those found guilty of raising funds through token sales, expanding its crypto crackdown. Amid primarily sensitive market conditions as Apple, Microsoft, and other Big Tech stocks led the market selloffs, China’s decision to come down firmly on crypto added fuel to the fire.
The effects of Russia’s military operation were seen on major indices, too, as Nasdaq 100 index plunged by more than 20% for the first time in nearly two years.
According to the statement released, China’s highest court amended its interpretation of its Criminal Law to raise public money through ‘virtual currency illegal. The amendment comes into force on March 1, 2022.
The ruling further stated that suspects would be prosecuted under Article 176 of China’s criminal law, which stipulates prison sentences between three and 10 years and fines between $7,900 (RMB 50,000 ) and $79,000 (RMB 500,000) for crimes involving large sums of money.
According to the criminal law, less serious offenses will be prosecuted with under three years of prison and fines between $3,160 (RMB 20,000) to $31,600 (RMB 200,000).
China’s Tussle With Crypto Continues
Interestingly, while China had banned crypto-based fundraising in 2017, the new amendment allows the Chinese courts to issue sentences to criminals officially. That said, jail terms for the said crimes would vary based on the intensity of the offense and the money involved in the crime.
Notably, the People’s Bank of China and several other top-tier agencies had declared that crypto transactions were illegal fundraising back in September 2021. The Thursday court ruling formally designates them as crimes, determining related punishments.
In May 2021, China’s State Council ordered a crackdown on crypto mining and trading that led to the migration of a dozen of crypto mining firms and crypto organizations. The same also led to the fall of the crypto market in May when BTC dropped to as low as $30K, and Ethereum’s price plunged to a low of $1750.