China tightens criminal liability for fundraising in cryptocurrencies

The Supreme People’s Court of China has amended the legal provisions on illegal fundraising, tightening criminal liability.

Punishments for fundraising in cryptocurrencies have been set at a prison term of three years. Those found guilty will also be sentenced to a fine, the size of which depends on the length of imprisonment:

• from three to seven years — from 100,000 to 5 million yuan (~$15,830–$791,870);
• over seven years — from 500,000 yuan (~$79,187).

If the amount raised exceeds 100,000 yuan, it will be regarded as a ‘large amount’. Amounts over 500,000 yuan are classified as an ‘especially large amount’.

A softer punishment is aided by the return of misappropriated funds and active cooperation with investigators. Aggravating circumstances include an ongoing criminal case against the accused or the fact that he has been subjected to administrative liability for similar acts within the last two years.

China banned the conduct of ICO in autumn 2017.

As reported in September 2021, the People’s Bank of China, in a joint statement with nine state agencies, classified cryptocurrency operations as illegal financial activity.