• China’s crackdown on cryptocurrencies continues as the country’s Supreme Court declares fundraising through cryptocurrency illegal.
• This new law takes effect March 1, 2022.
• One of the four attributes that were added to the new law is digital currency transactions.

China’s crackdown on cryptocurrency took another turn on Thursday as the country’s Supreme Court declared it illegal to use or any other cryptocurrency as a means for fundraising.

This revision to the country’s judicial interpretation for illegal fundraising is the first time that China has included virtual currency transactions. This means that any activity or behavior related to virtual currency absorption will be penalized.

This policy modification is intended to reduce the risk associated with the digital currency crowdfunding and absorption of public funds. This new law is effective March 1, 2022.

Local media reported that the revised law also increased the punishment and conviction for all criminal fundraising offenses. The law was amended to include online lending and digital currency transactions.

China’s strict policy on cryptocurrency is nothing new, as the country has already announced over a dozen bans relating to a variety of cryptocurrency activities in the past several years. Most recently, in 2021, an advisory committee made a blanket ban all cryptocurrency-related activities.

All cryptocurrency transactions in China have been declared illegal and foreign exchanges have been prohibited from selling any services on the platform. To eliminate the vast majority of cryptocurrency trading and mining in the country, the state regulators continue to enforce more regulations.

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