China’s Warning on USDT Exchange: Jail Terms and Massive Fines Imposed
China's Supreme People's Procuratorate recently issued a cautionary statement regarding the use of Tether (USDT), emphasizing its illegality in converting local currency to foreign currency.
This warning came in conjunction with a joint declaration released on December 27 by the Supreme People’s Procuratorate and the State Administration of Foreign Exchange (SAFE), urging stricter measures against the use of Tether (USDT) for currency exchanges.
The document expressly prohibits the conversion of Chinese yuan into foreign currencies using USDT, and local branches have been instructed to take punitive actions against any illicit foreign exchange activities.
In a notable case, Zhao Dong, identified as the founder of RenrenBit, a crypto trading platform, faced severe penalties for facilitating transactions between cryptocurrencies and local currencies. His involvement in purchasing United Arab Emirates (UAE) dirhams with Tether (USDT) and subsequently selling them for Chinese yuan in mainland China led to a substantial fine of $322,000 and a seven-year prison sentence.
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Another individual was sentenced to nine months in prison for purchasing $13,067 worth of Tether (USDT) in August 2023.
This stringent stance aligns with China’s longstanding ban on cryptocurrencies and related activities, including trading and mining, established over two years ago. Despite these restrictions, stablecoins like USDT had maintained popularity within the country. Earlier, a court ruling in 2022 had explicitly stated that stablecoins could not be used for salary payments. However, as of October 2022, the Chinese crypto market persisted, albeit on a smaller scale than previously observed.
Moreover, China has emerged as a key player in the development of Central Bank Digital Currencies (CBDCs), showcasing significant progress in their adoption. Various regions within the country have begun integrating digital currencies into everyday transactions, such as public transportation expenses.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
