China Bitcoin manhunt strengthens heavy fines and jail sentences. Fundraising with digital currencies in China is already illegal, but now the prosecutors can go after users with major penalties in tow.
The Supreme Court of China has declared a ruling that specifies severe penalties for offenders who use cryptocurrency to raise funds. These charges range up to 10 years in prison and fines of up to 500,00 yuan which is $79,000.
China’s Brutal Penalty Charges on Crypto Users
China’s years of a crackdown on crypto users have stepped up to a whole new level, thanks to their new Supreme Court ruling that clears the pathway for fines and potentially lengthy jail sentences to crypto users found guilty of fundraising via crypto tokens.
The Supreme Court’s ruling released earlier today, this decision specifies that “virtual currency” transactions used for raising said funds can be prosecuted by law, with varying penalties depending upon the amount of money raised via the transaction. The provisional law states that these charges range up to 10 years in prison and fines of up to 500,00 yuan which is $79,000.
China’s Ban on Cryptocurrency
China had previously banned cryptocurrency fundraising in 2017 amid the global surge in initial coin offerings (ICOs). The ruling released earlier amends the country’s law to specify those digital currencies are included in the forms of fundraising which is now illegal within China, allowing full-blown prosecution.
The law takes on the 1st of March effective immediately. The said potential penalties would vary on the amount of cryptocurrency involved in the said alleged crimes. If the user is found guilty, the offender can potentially face up to ten years of jail sentence and also pay a fine of up to 500,00 yuan.
China has had gradually increased its rhetoric and rulings against cryptocurrency over the past decade, including a series of other significant proactive actions in 2021.
China Bitcoin Legal Battle
It was reported last May, several Chinese provinces shut down crypto mining operations after the Chinese Vice Premier, Liu He wrote that China must “crackdown on Bitcoin mining and trading behavior.”
The Chinese miners have had produced as much as 67% revenue of all new Bitcoins before the ban, reported as per the University of Cambridge. However, that number drastically fell as miners were forced to shut down or move out of the country. As per the latest reports, the available data show that the United States topped the list with grossing 35% of the total Bitcoin mining hash rate.
Last June 2021, the People’s Bank of China instructed the country’s other top banks and payment providers to specifically target transactions with crypto-related firms. In September, the People’s Bank of China and nine other government bodies collectively reiterated China’s broad ban on Cryptocurrency.
China has pushed forward with its own plans to release a “Central Bank Digital Currency”, infamously known as the CBDC, introduced as the digital yuan. Unlike decentralized cryptocurrencies, the Chinese government will seize absolute control over the digital yuan, which can potentially replace paper money and coins. China has released its digital wallet in January ahead of a pilot program.