Crypto crowd fundraising may lead to 10-year jail: China Judicial Interpretation

First time in history, China’s Supreme Court specified it’s judicial interpretation and stated that trading and raising funds in crypto will be an illegal and punishable offense.

In mid of 2021, China planned and imposed its ban law on the crypto industry. China eliminated the whole crypto Industry from the country whether it was mining, trading, holding, or giving any services in crypto. 

On 24 February, the Supreme Court of China released its judicial interpretation of criminal law on crypto for the first time in its history. Under the updated statement in the Judicial Interpretation of criminal law, raising funds in crypto or involvement with crypto, as a part of trading, will be subject to illegal offense. 

This Judicial Interpretation will clearly explain to the courts and judges how the laws are made officially to work against the proceedings of such crimes, which are associated with crypto or any other related illegal activities.

Under this judicial interpretation, when four conditions will be met then it will go under illegal crypto trading & fundraising.

“public fundraising, unspecified fundraising targets, promising returns on capital and interest, and if activities violate laws and regulations.”

Fundraising worth more than 50 million yuan (US$7,913,645) or raising funds from more than 5,000 people or losing 25 million Yuan directly from the donor, will result in the punishment of 10 years in jail. 

Zhang Xiaoxiao, the founder of ChainAudit, provides consultancy services to public security agencies of China on criminal economic activities, stated that the latest judicial interpretation will also restrict all the OTC, cryptocurrency exchange, ICO/IDO, yield farming, and cryptocurrency futures exchange under the fundraising category.

This Judicial Interpretation will come into effect from 1 March of this year. It will help to provide a better clarification to the courts to make decisions on such matters.

Last year, in a case a person claimed that Bitcoin is nothing then why doesn’t the government allow the people to own crypto assets, because these are useless and worthless under the laws. Probably such questions forced the government judicial agency to take such steps. 

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