What impact and risks does virtual currency USDT have in China?
In China, virtual currency-related business activities are considered illegal financial activities.
Buying and selling USDT (Tether) carries significant financial risks. From a regulatory perspective, virtual currency trading and speculation disrupt the economic and financial order, fostering illegal activities such as gambling, illegal fundraising, fraud, pyramid schemes, and money laundering. Moreover, the virtual currency market lacks a clear value basis, leading to dramatic price fluctuations that can easily result in severe financial losses for investors.
In China, buying and selling USDT poses certain legal risks; it is not clearly illegal, but related transactions are not protected by law. The following are the specifics:
Policy regulations on buying and selling USDT
In September 2017, the People's Bank of China, along with seven ministries, issued the "Notice on Risks of Token Financing," explicitly prohibiting the trading of RMB and digital currencies as well as the initial public offering of digital currency. On September 24, 2021, the People's Bank of China and ten other departments issued a notice clarifying that virtual currency-related business activities are illegal financial activities.
Judicial practice
In actual judicial cases, the handling of cases involving USDT often depends on the specific circumstances of each case, and there has not yet been a unified precedent indicating the absolute legality or illegality of USDT trading.
Trading risks
USDT trading speculation can disrupt economic and financial order, leading to illegal activities such as gambling, illegal fundraising, fraud, pyramid schemes, and money laundering. If dirty money is received, the account receiving the money could be frozen by the police; if USDT is used to engage in illegal activities and transactions, it is also illegal and may even lead to criminal liability.