The Supreme Court of China Amends Law With New Powers to Jail Crypto Fundraisers

The highest judicial body in China, the Supreme People’s Court of the People’s Republic of China has amended the interpretation of the country’s Criminal Law to make all forms of unauthorized fundraiser an illegal activity in the country. As contained in an official announcement by the Supreme Court, the amendments are on track to become valid from the beginning of next month.

It has been a long haul by the Chinese government to ban all things crypto on its shores. While there is a standing order banning crypto fundraising as far back as 2017, the new amendments have empowered courts in the country to hand out jail terms to offenders across the board. As gleaned from the Supreme Court update, the jail terms will range from 3 to 10 years depending on the amount of money involved.

In giving adequate clarity to the amendment, the Supreme Court noted that funding solicitations that are above 100,000 yuan ($16,000) will be deemed a “large amount.” The judicial body said that if that raised fund is more than 500,000 yuan ($79,000), it will be identified as “enormous,” following the stipulation in Article 192 of the Criminal Law.

IDOs and ICOs Avoiding China

The evolution of the digital currency ecosystem is happening at a very fast pace, and crowdfunding either through an Initial Decentralized Offering (IDO) or Initial Coin Offerings (ICOs) are some of the ways to raise capital to finance blockchain projects.

In the wake of the damning crackdown in China, a number of project owners looking to raise funds have often secluded China owing to the ban of similar measures in the past. The hostility of China has just been taken to a new level and as such, the blockchain-based outfits will notably make all attempts to shun Chinese investors even as they solicit funding for their respective projects.

The optics remain bad for China, and while registered companies have had to comply, it is ripping the nation off the hoard of promising companies looking to tap into the enthusiasm of investors in China. While the new law does not stipulate that applications to raise funds will be dead on arrival, it sure suggests that Beijing wants a complement to its 2021 crackdown on the nascent crypto industry.

Enforcement actions is becoming necessary amongst Asian countries including South Korea which recently jailed an Exchange CEO for 16 years for fraud.