Crypto News- Chinese authorities are escalating their efforts to tighten control over cryptocurrency usage, especially Tether (USDT), in foreign exchange trading, more than two years after implementing a sweeping ban on crypto activities. The Supreme People’s Procuratorate (SPP), China’s highest national agency for legal prosecution, collaborated with the State Administration of Foreign Exchange (SAFE) to issue a joint statement on December 27, advising the public against utilizing USDT as an intermediary for trading Chinese yuan with other fiat currencies.
China Urges Stringent Measures Against Tether Stablecoin in Unlawful Forex Activities
The SPP and SAFE categorically labeled the use of Tether in cross-border foreign exchange transactions as illegal, urging local officials to enforce more stringent measures. They underscored that any involvement in cryptocurrency exchange against the yuan, including indirect participation such as providing technical support or exchange services, is prohibited by law.
The joint statement highlighted a criminal case involving Zhao Dong, a Chinese citizen and the founder of the crypto trading desk RenrenBit, who played a role in facilitating crypto and local currency trading. Zhao Dong received a seven-year jail sentence and a fine of 2.3 million yuan ($322,000) for purchasing USDT with United Arab Emirates dirhams and subsequently reselling it in mainland China for yuan.
This recent action by Chinese authorities transpires more than two years after the initial ban on cryptocurrency activities in 2021, encompassing trading and mining. Despite these regulatory measures, reports suggest that cryptocurrencies like Tether maintained popularity in China. In 2022, the Chaoyang District People’s Court in Beijing prohibited the use of stablecoins, including USDT, for salary payments after a company unlawfully compensated an employee with USDT.
Enforcement activities against Tether transactions persist, exemplified by a citizen receiving a nine-month sentence for acquiring 94,988 Chinese yuan ($13,067) worth of Tether in August 2023. Despite the regulatory crackdowns, China’s crypto market demonstrated resilience, with the country reemerging as the second-largest Bitcoin mining hub as of October 2022, as indicated by local reports.
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