China has passed a new policy that will make fundraising with cryptocurrencies and other forms of digital assets illegal in the country.
The new policy, initiated by the Chinese Supreme Court, is aimed at reducing the risk of the circulation and use of digital currencies. It also wants to prevent the absorption of funds from the public using digital currencies.
Fundraising In Crypto Now Illegal
This also means that any form of fundraising that involves the contribution of participants using cryptocurrencies will be termed illegal in the country.
China has always expressed its distaste for cryptocurrency trading and mining in the country. Several laws have already been passed to prevent trades involving digital assets.
The latest development is another step to cripple any activity that involves the exchange of digital assets in the country.
The Law Will Take Effect From March 1
This will be the first time the Supreme Court of China will be adding digital assets in the judicial interpretation of illegal fundraising. The law is meant to punish any behavior of absorbing funds through virtual currency.
This is a revision of the judicial interpretation of the law, which maintains four of its original characteristics. The revision also improved upon the conviction and punishment for crimes on illegal fundraising. Other sections it touched on include financial leasing, digital currency transactions, online lending, and crime. The new law will be coming into effect on March 1, 2021.
China is known to impose strict cryptocurrency policies. Over the past decade, the country has announced more than a dozen bans on cryptocurrency-related activities. However, the crypto community felt the weight of the law in 2021 when the government made the biggest clampdown on the industry.
The top regulators in the country jointly issued an outright ban on crypto trading and mining, forcing many digital asset companies to move to other more friendly regions.
The new guideline declared all types of crypto-related activities illegal and banned crypto exchanges from providing such services. So, the recent regulatory update on fundraising in crypto may not be too surprising for many people.
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