China’s Supreme People’s Court has ruled that cryptocurrency fundraising is illegal, and the rule takes effect on March 1.
A tightened regulatory environment is further contributing to the country’s crackdown on financial scams, which has gained notoriety for its crackdown on crypto over the years.
While anti-crypto efforts have been ongoing since 2017, the latest development gives Chinese courts the power to issue sentences to criminals officially.
The value of the amount raised will determine penalties.
If a fundraiser raises more than 100,000 yuan ($15,800), the court deems it as “large”.
If the amount exceeds 500,000 yuan ($79,000), it will be identified as “enormous.”
The case will be considered “extremely serious” if it involves a “huge” amount of 50 million yuan, a loss of at least 25 million yuan, or 5,000 people.
A person who commits such a crime can be jailed for over a decade.
Less serious crimes will be prosecuted with under three years of prison and RMB 20,000 ($3,160) to RMB 200,000 ($31,600) in fines.
The latest crackdown is meant to punish illegal fundraising crimes in accordance with the law in order to maintain national financial stability.
Beijing is aggressively trying to get rid of crypto in the country by including it among the list of financial scams and money laundering.
In September, China’s central bank, the People’s Bank of China (PBoC), criminalized all cryptocurrency activity, including crypto transactions and mining.
As a result, miners started migrating their operations out of the country.
Before the ban, Chinese miners had produced as much as 67% of all new Bitcoins.
The advantage now goes to the US, allowing it to leapfrog China as the largest market for bitcoin mining.
It now accounts for more than 35% of the Bitcoin hash rate or computing power.