Bobos & Wojaks

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China Can Sentence Cryptocurrency Traders To More Than Ten Years In Prison


In its latest judicial interpretation of criminal law, announced on Thursday, the Supreme Court categorized bitcoin trading as a technique of unlawful fundraising for the first time in China’s history.

Judicial interpretation is the official interpretation of specific laws by the Supreme People’s Court (SPC) and the Supreme People’s Procuratorate (SPP), and hence has legal binding force.

Cryptocurrency trading is deemed illegal fundraising when four elements are met: public fundraising, unspecified fundraising targets, promising profits on capital and interest, and acts that contravene laws and regulations.

OTC, cryptocurrency exchange, ICO/IDO, yield farming, and cryptocurrency future exchange are all forms of unlawful fundraising, according to Zhang Xiaoxiao, the founder of ChainAudit, which provides advisory services to China’s public security departments on criminal economic operations.

Illegally raising more than 50 million yuan (US$7,913,645) from 5,000 persons, or causing direct losses to donors exceeding 25 million yuan, can result in a ten-year prison sentence.