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- The court defined substantial amount fundraising as over 100,000 yuan ($15,800). If the fundraiser involves a large sum of 50 million yuan, a loss of at least 25 million yuan, or 5,000 people, it is considered very serious and could result in a decade in prison.
- Although Beijing’s anti-crypto drive began years before, last year’s crypto mining prohibitions in China, which began rolling out in the summer, saw Bitcoin’s mining difficulty drop by about 28% in July, as miners began to migrate their operations out of the country.
- The Bitcoin hash rate dropped by roughly 50% after the mining prohibition, but the computer power that secures the network recovered in the months that followed.According to the Cambridge Bitcoin Electricity Consumption Index, the United States now accounts for more than 35% of the Bitcoin network hash rate
China’s highest court has declared that utilizing cryptocurrency to raise funds is illegal, according to a new interpretation of national law. According to the South China Morning Post, raising donations using cryptocurrencies is now considered an illegal activity in China, according to a new legal interpretation from the country’s Supreme People’s Court. The new restriction is part of a broader set of legislation aimed at preventing financial fraud in the country, which has long been known for its anti-cryptocurrency campaign.
Penalties Include Time In Prison
According to the Supreme People’s Court’s opinion published on Thursday, the consequences of crypto fundraising are dependent on the quantity raised. The legislation, which takes effect on March 1, indicates that Chinese courts can now officially sentence offenders to prison terms ranging from less than three years to more than ten years. The court defined substantial amount fundraising as over 100,000 yuan ($15,800). If the fundraiser involves a large sum of 50 million yuan, a loss of at least 25 million yuan, or 5,000 people, it is considered very serious and could result in a decade in prison.
The new legal interpretation aims to punish illegal fundraising crimes in accordance with the law and maintain national financial security and stability and it aligns with Beijing’s aggressive efforts to eradicate cryptocurrency in the country–classifying it as a form of financial fraud and money laundering.
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The Amendment Doesn’t Come As A Shock
The People’s Bank of China (PBoC), China’s central bank, issued a memo in September criminalizing virtually all cryptocurrency activities, from crypto transactions to mining. Although Beijing’s anti-crypto drive began years before, last year’s crypto mining prohibitions in China, which began rolling out in the summer, saw Bitcoin’s mining difficulty drop by about 28% in July, as miners began to migrate their operations out of the country. The Bitcoin hash rate dropped by roughly 50% after the mining prohibition, but the computer power that secures the network recovered in the months that followed.
According to the Cambridge Bitcoin Electricity Consumption Index, the United States now accounts for more than 35 percent of the Bitcoin network hash rate. Finally, earlier this month, Bitcoin hit a new all-time high hash rate of 248.1 exahashes per second (EH/s), demonstrating more than ever network resiliency.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
