Chinese authorities are taking steps to curb the use of cryptocurrencies such as Tether (USDT) in foreign exchange trading, more than two years after implementing a comprehensive ban on crypto activities. The Supreme People’s Procuratorate (SPP) of China, the highest national agency for legal prosecution, issued a joint statement with the State Administration of Foreign Exchange (SAFE) on December 27. This advisory warns the public against utilizing USDT as an intermediary for trading the yuan against other fiat currencies.
The SPP and SAFE emphasized the need for local officials to enforce stricter measures against the use of Tether stablecoin in cross-border foreign exchange transactions. According to the joint statement, utilizing Tether as a medium of exchange between local and foreign currencies is deemed illegal. The authorities instructed local branches to enhance coordination to “punish fraudulent foreign exchange purchases, illegal foreign exchange transactions, and other foreign exchange-related illegal and criminal activities” in accordance with the law.
Chinese authorities underscored that any activity involving cryptocurrency exchange against the yuan is considered illegal, encompassing not only direct transactions but also indirect involvement such as technical support or offering exchange services. This new statement follows the major ban on cryptocurrency activities imposed by mainland China authorities over two years ago, which included prohibitions on trading and mining. In recent years, local enforcement agencies have been actively cracking down on Tether transactions, exemplified by a case where a citizen received a nine-month sentence for purchasing 94,988 Chinese yuan ($13,067) worth of Tether in August 2023.
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