China Tightens Grip on Cryptocurrency Trading, Targets Use of Tether in Foreign Exchange
cryptonews.comChinese authorities have issued a stern directive for an enhanced crackdown on the use of cryptocurrencies, emphasizing their role in illegal foreign exchange trading as part of ongoing efforts to mitigate financial risks.
In a joint statement released on Wednesday, the Supreme People’s Procuratorate (SPP) and the State Administration of Foreign Exchange (SAFE) instructed prosecutors and forex regulators to intensify their supervision of foreign exchange activities.
The statement highlighted specific concerns regarding the use of the Tether stablecoin, commonly known as USDT, as an intermediary in trading yuan with other currencies. Notably, Tether is pegged to the US dollar, offering relative stability compared to other cryptocurrencies.
The SPP and SAFE urged their local branches to bolster coordination efforts, emphasizing the need to “punish fraudulent foreign exchange purchases, illegal foreign exchange transactions, and other foreign exchange-related illegal and criminal activities lawfully.” The goal is to efficiently handle each case, thereby preventing and resolving financial risks to uphold national financial security.
The statement emphasizes that converting yuan to cryptocurrency and vice versa is illegal in China. This includes using cryptocurrencies as a medium to convert yuan into foreign currencies or the reverse.
Furthermore, the statement also added that individuals who are not directly involved in transactions but knowingly provide technical support, such as building and maintaining a website, are regarded as “accomplices” in the eyes of the authorities.
The prosecutor’s office cited eight “typical cases of illegal foreign exchange crime“—two of which used the Tether stablecoin as an intermediary—and called
