China’s new law made crypto transactions illegal
For the first time in China’s history, the Supreme Court labeled cryptocurrency trading as a method of illegal fundraising in its latest judicial interpretation of criminal law, which was released on Thursday.
Judicial interpretation is the official interpretation made by the Supreme People’s Court (SPC) and the Supreme People’s Procuratorate (SPP) on the application of certain laws, and, therefore, has legal binding force.
When four conditions are met — public fundraising, unspecified fundraising targets, promising returns on capital and interest, and activities that violate laws and regulations — cryptocurrency trading is considered illegal fundraising.
According to Zhang Xiaoxiao, the founder of ChainAudit, which provides consulting services to China’s public security departments on criminal economic activities, OTC, cryptocurrency exchange, ICO/IDO, yield farming, and cryptocurrency future exchange are all examples of illegal fundraising.
Illegally raising more than 50 million yuan (US$7,913,645) from 5,000 people or causing direct losses to donors totaling 25 million yuan can result in a prison sentence of more than ten years.
On March 1, the judicial interpretation will take effect.
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