The Supreme Court in China in its latest legal interpretation of criminal law took a clear position against crypto trading. For the first time in the country’s history, cryptocurrency trading is classified as a means of illicit fundraising.
A judicial interpretation is the Supreme People’s Court’s official interpretation of how a law should be enforced in China. For cryptocurrency trading to be illegal, four conditions must be met. These are public fundraising, unspecified fundraising goals, promised returns on capital and interest, and violating laws and regulations.
the People’s Bank of China and other high-level authorities had already declared in September 2021 that crypto transactions are illegal fundraising. The current interpretation also formally classifies these activities as crimes and sets appropriate penalties.
The maximum sentence in China is ten years
Anyone suspected of crypto trading in China will be prosecuted under Article 176 of the Chinese Criminal Code. The penalties range from three to ten years in prison and fines from RMB50,000 (US$7,900) to RMB500,000 (US$79,000) if large sums of money are involved. This applies when the turnover is more than 50 million yuan (approx. USD 8 million), there are at least 5,000 traders or their losses reach 25 million yuan.
Less serious offenses are punishable by less than three years in prison and fines ranging from 20,000 RMB (US$3,160) to 200,000 RMB (US$31,600), according to the law. The change will take effect on March 1st. Provincial authorities in China continue to crack down on the crypto industry. Eastern Zhejiang Province announced increased electricity tariffs for mining on Wednesday. Prices have also risen in Hainan and Inner Mongolia.