China declares cryptocurrency fundraising illegal

On February 25, China’s Supreme Court provided a legal interpretation that raising funds using cryptocurrency and digital assets should be considered a form of ‘illegal financing’. For the first time in China’s restrictive policy towards digital assets, prison sentences are threatened to the perpetrators, going up to ten years in prison and fines going up to $80.000.

According to the report from the ‘South China Morning Post‘ ‘Fundraising by any other name is not off the hook, either. Online lending and financial leases considered to be fundraising could be charged with the illegal absorption of public savings, the court said.’

This court legal interpretation is a conclusion of the six months effort from China’s central financial institution, to put digital assets outside the legal boundaries. The decision will result in the change of the Criminal Law, concluding the regulatory push started last year. Back in September 2021, China decided to close down a large industrial facility in central provinces, used for mining bitcoin cryptocurrency. Alongside, it declared all digital asset transactions illegal.

The Criminal Law will be amended starting from March 1st. Decision of China’s Supreme Court can be found here. [Mandarin]