In recent weeks, it has been a trying time for the cryptocurrency industry, from experiencing a bearish market trend to the uncertainties of a possible conflict in Eastern Europe and now a war in Ukraine.
Another area of the continent that the crypto community wants to see become a trading hub is China, but this appears not to be happening any time soon.
The supreme court of China confirmed on Thursday the decision of the Chinese government to ban the use of and circulation of digital currencies as illegal in the country, with offenders facing up to 10 years in prison and a hefty fine.
The Chinese government already outlawed the use of digital currency last year, with no legal implications as of then. Still, the recent proclamation by the supreme court has set the tone for labeling any cryptocurrency transaction as illegal, and the Chinese government can take any legal action against suspected traders.
The government’s crackdown on crypto mining and trading began in September last year following the shortage of energy across China. The move prompted a handful of firms to shift their operations to neighboring countries like Singapore or shut down operations altogether.
Before the crackdown incident, China held the largest crypto-miner globally. Kazakhstan authorities followed China’s footsteps, forcing miners to move their tools to a new mining destination.
Legal Implications
The recent court ruling has outlined a prison term of three to ten years and a fine in the region of $7918.58 (50,000 yuan), with large transactions attracting a fine of about 500,000 Yuan. Offenses deemed less serious attract a fine of 20,000 Yuan or more. The new law, as announced, becomes effective on March 1st.
Before the supreme court’s announcement, there had been rumors that the government would not ban the use and circulation of digital currency because the government hiked electricity bills for crypto miners. Still, the court’s judgment has put all rumors to rest.
On the bright side, the move by the supreme court of China will have little impact on the whole industry as markets have rebounded after an initial scare. The focus is now on the conflict between Russia and Ukraine and its supposed impact on the value of cryptocurrency.
Crypto Exposure In China Still Remains
Despite the earlier action by the Chinese government and the recent decision by the Supreme Court of China, the country is not completely purged of crypto fever as the Digital Yuan introduced during the Winter Olympics is still in circulation.
The other area of concern is the NFT ecosystem, as it is still subjected to interpretation by the supreme court even though the government has not decided on it yet.
The Xinhua News Agency, the state-controlled media house, recently released some digital collectibles minted on a blockchain by the Tencent Cloud System.
Two of China’s largest technology companies, Alibaba and Tencent, are known to have plunged resources into the NFT for some time now, with Alibaba reported to have launched its NFT marketplace last year.
