Digital currencies will be illegal in China

China is one of the countries where cryptocurrency mining and trading is prohibited

Yesterday, the Chine News Networks published an article about the new legal interpretations introduced related to trading with Cryptocurrencies.

This is not the first legal measure of this kind. In 2010, China formulated for the first time the ‘Interpretation of the Supreme People’s Court on Several Issues Concerning the Specific Application of Law in the Trial of Criminal Cases of Illegal Fund Raising’ that was issued until 2014.

During the year 2019, as a result of the great technological advances and the significant numbers of illicit fundraising, the supreme court issued an Interpretación concerning the specific application in the trial criminal cases of illegal fundraising. In March 2021, the «Amendment to the Criminal Law of the People’s Republic of China (Eleven)» was implemented, making major revisions to the criminal law provisions for the crime of illegally absorbing public deposits and fund-raising fraud.

On February 24 of this year, it was published the «Decision on Amending the Interpretation of the Supreme Court of Justice on Several Issues Concerning the Specific Application of Law in the Trial of Criminal Cases of Illegal FundRaising».

The original provisions of the «Interpretation» consist of nine articles, in which the fist of them talk specifict about cryptocurrencies. In the item 1 and 2 of the Article 1 it was clarified that the acquisition of Cryptocurrencies and any other way of acquisition of funds not permitted will be considered an illegal activity.

The legal sanctions that will be taken against those who make purchases of Cryptocurrencies and related are specified later.

«Illegal absorption or disguised absorption of public deposits, mainly for normal production and business activities, can be exempted from criminal punishment if the absorbed funds can be cleared before a public prosecution is filed; where the circumstances are significant and minor and the harm is not great, it shall not be treated as a crime».

This decision will take effect on March 1, 2022. Until now, the Chinese government seems interested in electronic commerce and technologies that support NFTs, using them for the authentication of digital works of art.

However, the Chinese government is opposed to the decentralized system that Cryptocurrencies manage, because It is outside of the state regulation.