China Tightens Laws: Fund Raise Via Token Sales Could Result Jail Time

Under the newly revised law by the Chinese Supreme Court, individuals who are found raising funds via token sales could be jailed.

China’s highest court changed its interpretation of the country’s Criminal Law, making it illegal to raise funds from the public through “virtual currency”, according to a statement. The amendment takes place from March 1 onwards.

China initially banned crypto-based fundraising back in 2017, but through the new amendment, Chinese courts can now officially issue jail sentences to violators. Depending on amount raised, the jail terms will vary from approximately 3-10 years.

If the amount of crypto fundraising exceed 100,000 yuan (~$16,000), it will be considered a “large amount.” If that amount is more than 500,000 yuan (~$79,000), it will be deemed as “enormous amount,” states Article 192 of the country’s Criminal Law.

China has been very aggressive to totally ban crypto in the country. September last year, the nation’s central bank issued a total ban on all crypto transactions, declaring them illegal. Crypto-related business activities, such as trading and mining, were also announced illegal.

U.S. has seemingly been a large beneficiary on China’s crypto crackdown, making it the largest market for bitcoin mining. The U.S. now account for more than 35% of the Bitcoin hashrate or computing power, according to the Cambridge Bitcoin Electricity Consumption Index.