Fundraising via Cryptocurrency is Now a Criminal Offence in China
China has issued a new ban on raising funds through “virtual currency,” declaring the practice illegal.
In China, anyone who uses cryptocurrency to raise funds for a cause will face a prison sentence.
The severity of the punishment will be determined by the amount of capital one has amassed through the use of virtual assets, but jail time is unavoidable for all rule violators. The move is part of China’s draconian crackdown on all cryptocurrency-related activities.
The Chinese Supreme People’s Court announced the development on Thursday, February 24. If the amount of illegally or disguised absorption of public deposits exceeds CNY 500,000, or the direct economic loss caused to the depositor exceeds CNY 250,000, criminal responsibility will be investigated in accordance with Chinese law, according to an official statement from Chinese authorities.
Other factors, such as prior criminal records, as well as administrative penalties for illegal fundraising within two years, will be considered when determining the punishment for people raising money with cryptocurrency.
Other countries, including Ukraine and Canada, have reported instances of crypto-backed fundraising in recent days.
According to a report by CryptoPotato, China intends to eradicate financial crimes and punish those who engage in illegal means of raising capital with these revised guidelines.
China’s hostility toward the cryptocurrency sector is nothing new. In September of last year, the country that once had the most crypto miners in the world imposed a blanket ban on crypto mining and trading.
China has never provided a list of reasons for its unusual stance on the crypto sector.
Elon Musk, CEO of Tesla, did, however, mention last year that crypto mining-related electricity shortages in China could be one reason.
Furthermore, crypto transactions are untraceable, and the extent to which cryptocurrencies are being used to facilitate illicit activities such as money laundering, tax evasion, and terror funding has long been a source of concern for governments around the world.
