China has criminalised the use of cryptocurrency for fundraising, the country’s highest court ruled in a novel interpretation of national law.
According to the South China Morning Post, a new legal interpretation by China’s Supreme People’s Court defines cryptocurrency fundraising as an unlawful activity in the nation.
The new prohibition complements tighter legislation targeting financial frauds in the nation, which has gained notoriety for its years-long campaign on cryptocurrency.
According to the Supreme People’s Court’s opinion issued on Thursday, the consequences of crypto fundraising are conditional on the amount collected.
The legislation, which takes effect on March 1, indicates that Chinese courts may now formally sentence criminals to prison terms ranging from less than three years to more than 10 years. The court defined as “big sum” fundraising that exceeds 100,000 yuan ($15,800).
If fundraising involves a “colossal” amount of 50 million yuan, a loss of at least 25 million yuan, or involves 5,000 people–all of which are classified as “very serious”–one might spend over a decade in prison.
The revised legal interpretation is aimed at “punishing illegal fundraising crimes in accordance with the law and ensuring national financial security and stability,” and is consistent with Beijing’s aggressive efforts to eradicate cryptocurrency in the country–packaging it as financial scams and money laundering.
The modification is hardly surprising
China’s central bank, the People’s Bank of China (PBoC), released a memo in September criminalising almost all cryptocurrency activity–from cryptocurrency transactions to mining.
Although Beijing’s campaign on cryptocurrency began years before, last year’s prohibition on crypto mining in China, which began rolling out in the summer, caused Bitcoin’s mining difficulty to plummet about 28 percent in July as miners shifted their operations out of the country.
The mining prohibition reduced the Bitcoin hash rate by approximately 50%, but the processing power safeguarding the network rebounded in the months that followed.
As a consequence, according to the Cambridge Bitcoin Electricity Consumption Index, the US currently accounts for more than 35% of the Bitcoin network’s hash rate.
To summarise, Bitcoin reached a new all-time high hash rate of 248.1 exahashes per second (EH/s) earlier this month, demonstrating greater than ever resistance to network assaults.
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