China Tightens Grip on Crypto Use in Foreign Exchange Trading
Summary:
China's Supreme People's Procuratorate and the State Administration of Foreign Exchange issued a joint statement, warning against the use of Tether in foreign exchange trading and declaring such activities as illegal. This move, following a major crypto ban over two years ago, emphasizes that any activity involving cryptocurrency exchange against yuan, direct or indirect, is illegal. Authorities have been regularly cracking down on Tether transactions, with one individual recently facing a nine-month sentence for buying Chinese yuan worth of Tether.
In a bid to enforce stricter control over foreign exchange trading involving cryptocurrencies, China's principal legal enforcement agency, the Supreme People's Procuratorate (SPP), issued a warning against the practice of leveraging Tether (USDT) to trade yuan for other fiat currencies. This action comes over two years since a significant crypto ban was implemented in the country.
In a combined announcement with the State Administration of Foreign Exchange (SAFE) on December 27, Chinese authorities have called for rigorous measures to curb the use of the Tether stablecoin in cross-border forex transactions.
The joint communication from the SPP and SAFE underscored the illegality of utilizing Tether as a conduit of exchange involving local and foreign currencies. The two entities have urged their county branches to enhance coordination with a view to punishing illicit activities connected with foreign exchange, such as fraudulent fx purchases and unlawful fx transactions, consistent with existing laws.
The Chinese administrators have made it clear that engagement of any sort with cryptocurrency exchanges for yuan is prohibited, this also includes indirect association like offering tech support or exchange services.
The statement follows two years behind the major ban placed on all cryptocurrency activities, including trading and mining, across mainland China. Local enforcement has been clamping down on Tether dealings since then, leading to punitive action against a citizen found guilty of buying 94,988 Chinese yuan (equivalent to $13,067) worth of Tether in August 2023, who was sentenced to a nine-month term.
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Published At
12/29/2023 10:25:52 AM
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