Chinese authorities have recently introduced changes to the country’s laws that criminalize individuals or groups who use the method of selling digital currencies to raise the capital needed for their business and could face up to 10 years in prison.
According to Bloomberg, China recently amended its penal code to include the issue of money laundering crimes. These laws will give authorities more power to completely eradicate the area of digital currencies, which they banned last year, using severe sanctions for violators in their own country.
China’s Supreme Court on Thursday issued the latest provisions of its criminal law on illegal fundraising. For the first time, the amendment considers the sale of digital currencies as one of the illegal ways to raise capital in China.
According to the amendment, a person found guilty of illegal collection of money can receive up to 10 years in prison. However, China’s Supreme Court has not determined whether the digital currency will be treated differently from other methods of illegal fundraising at the time of sentencing.
While China banned the use of digital currency (ICO) in 2017 for projects operating in the country, local courts still do not have a clear legal framework for those who do not. Meanwhile, government bans on digital currencies in China have accelerated; The move culminated last year with a total ban on digital currency transactions.
Winston Ma, a professor at New York University School of Law, said:
This is the first legal provision of the Supreme Court to officially cover digital currency transactions under criminal law.
Incorporating such provisions into criminal law will turn China, once the center of the digital currency industry, into a graveyard of digital currencies.
China banned bitcoin in 2013, then continued to fight it, forcing miners and digital currency exchanges to move en masse to areas such as Hong Kong and Singapore. At the same time, it is one of the largest economies, having operated much earlier in the adoption of national digital currencies. China has previously used the digital yuan to make payments during the Winter Olympics.
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