China’s Supreme Court specified cryptocurrency trading as a means of illegal fundraising in its latest judicial interpretation of criminal law released on Thursday, the first time in the country’s history.
See related article: Court in China says trading in cryptocurrency ‘not protected by law’
Fast facts
- A judicial interpretation is the Supreme People’s Court’s official interpretation of how a law will be enforced.
- Cryptocurrency trading is considered illegal fundraising when four conditions are met — public fundraising, unspecified fundraising targets, promising returns on capital and interest, and if activities violate laws and regulations.
- OTC, cryptocurrency exchange, ICO/IDO, yield farming, and cryptocurrency future exchange are all within the scope of illegal fundraising, Zhang Xiaoxiao, the founder of ChainAudit who provides consulting services to China’s public security departments on criminal economic activities, told Forkast.
- Illegal funding raising over 50 million yuan (US$7,913,645) or from 5,000 people or causing direct losses of 25 million yuan to donors can lead to a prison sentence of more than 10 years.
- The judicial interpretation will come into effect on March 1.
See related article: Law can’t cover crypto losses, China court reiterates
