A draftof the guidelines has been released by the Legislative Affairs Office of the State Council, the executive Branch of the Chinese federal government. Officials are obtaining public remarks over the next month prior to formally starting the legal procedure.
Thoughbroadly concentrated on a series of fundraising activities, the fifteenth post of the draft ruleset determines cryptocurrency- based financing efforts as possible targets for investigations.
“If the department overseeing illegal fundraising activities found a fundraising without proper permission, or a fundraising that violates the relevant provisions of the State, and if one of the following circumstances is found, the department shall launch an administrative investigation. Other relevant departments shall cooperate with the investigation.
(2) to raise funds in the name of issuing or transferring equity, raising funds, selling insurance, or engaging in asset management activities, virtual currency, leasing, credit cooperation and mutual funds…”
Thedraft laid out that the federal government will develop an interdepartmental committee to fight unlawful fundraising. It likewise clarified, for the very first time, that individuals of unlawful fundraising will be accountable for their own losses.
Thereare presently 2 laws handling unlawful fundraising in Chinese criminal offense law system. The criminal offense of fund scams, which utilized tobe punishable by death, now brings an optimal sentence of life in prison. The other one– the criminal offense of unlawfully soaking up public deposits– brings an optimal sentence of 10 years in prison.
Thenew guidelines likewise come in the middle of a public outrage on pyramid selling frauds. Last month, a number of college graduates were discovered dead after being put behind bars and attacked by members of a pyramid selling company in Tianjin, China.