Crypto fundraising has been illegalized on the behalf of Chinese authorities, as stated by the prominent court in the national law’s unique interpretation. In line with the latest legal interpretation on the behalf of the Supreme People’s Court of China, utilizing cryptocurrency to raise funds is considered an illegitimate operation across the country, as per South China Morning Post. The new prohibition pursues strict regulations aiming at the financial frauds across China which turned into notorious for the crackdown thereof over crypto during the previous years.

Jail sentence punishments

Crypto fundraising’s consequences depend on the raised amount’s value, as per the interpretation that was released on Thursday on the behalf of the Supreme People’s Court. The amendment which was implemented on 1st March, mentions that the courts within china can now formally release jail sentences ranging between less than three years to more than ten years for the law-offenders. The court has declared the fundraising of above 100,000 yuan (nearly $15,800) to be a large amount.

If an exceptionally large amount of almost 50M yuan, or involvement of 5,000 people, or else a minimum loss of 25M yuan is found in fundraising, it is labeled as extremely serious, and more than a decade could be the sentence for such an offender. The respective legal interpretation takes account of penalizing the illegitimate fundraising-related crimes according to the law along with maintaining national financial stability and security as well as categorizing them under money laundering and financial scams.

The background of the amendment

In recent September, a memo was published on the behalf of the central bank of China, the PBoC (People’s Bank of China) to illegalize the entirety of the crypto operations taking account of the mining as well as transactions.

Even though the crackdown of Beijing authorities over crypto, which was initiated years back, posed the largest mining issue to the primary crypto asset (Bitcoin) as, in July, the value thereof dropped by nearly 28% due to the migration of the operations by the miners to some other locations outside the country.

The mining prohibition caused a drop in the hash rate of BTC by almost 50%, nevertheless, the respective position was recovered by the computing power specified for securing the Bitcoin network. Consequently, now the US is responsible for approximately 35% of the cumulative hash rate of the asset, as per the Cambridge Bitcoin Electricity Consumption Index.