Is Buying Bitcoin a Crime? Is Buying Bitcoin Illegal?

What crime is it to buy Bitcoin? Buying Bitcoin is considered a crime in which a person was sentenced to imprisonment for five years and six months to less than seven years for purchasing 10,000 RMB worth of digital currency.

In terms of criminal offenses, buying and selling stocks or funds is a violation of national laws and regulations and carries civil liability. Purchasing financial instruments such as bonds and insurance constitutes the crimes of illegal operation and contract fraud. Article 15, Paragraph 1 of the General Principles of the Civil Law of the People’s Republic of China, enacted on February 28, 2019, prohibits the sale of goods (including securities) to unspecified persons, prohibits the use of investment funds and interest payments to unlicensed issuers, and does not allow international financing through over-the-counter trading. (Caixin.com)

“Buying Bitcoin” is considered an illegal act. However, if someone purchases Bitcoin without acquiring any physical assets and without any change in value, it may be suspected of committing crimes such as theft, tax evasion, and fraudulent consumption.

Is Buying Bitcoin Illegal?

Bitcoin is a virtual asset and is commonly regarded as a carrier of currency. Although it is not recognized as currency or a financial product under Chinese law, according to relevant regulations, it is considered an illegal public financing activity, and investors who purchase this currency should bear the risk of illegality and also comply with regulations on anti-money laundering and counter-terrorism financing. Is buying Bitcoin legal? The authors of this article are Li Lihui, Associate Professor at Renmin University of China, and Chen Yunfeng, Dean of Tsinghua Yangtze River Delta Research Institute; the original title is “Does Buying and Selling Bitcoin Constitute Illegal Fundraising”.

We know that many so-called “Bitcoin” platforms or companies are actually using fake websites or company names to promote their trading platforms, claiming to be related to blockchain technology and operating as exchanges (such as Bitmain). However, these websites do not have any actual business operations. If there is no physical store for sales, it is suspected of engaging in illegal fundraising activities. There are many forms of this pyramid scheme: first, you transfer Bitcoin to a platform and then use various channels to convert the funds into legal digital currency or other tokens, using these tokens as investment returns to make money, and finally sell the Bitcoin in this way. This may result in significant losses for many people, making it difficult for them to recover their principal and pay exorbitant interest. Secondly, once fraud occurs, some people may not be able to withdraw their funds. Third, as most project parties are now engaged in ICOs, they either manipulate the market or go on the run, or they completely ignore regulations and only seek to evade them. Therefore, if you intend to hold Bitcoin for the long term, it is advisable to pay attention to these two aspects of the policy. (I am Mo Xinnan, author of Odaily Star Daily. To explore the real blockchain and request coverage, please add WeChat: 16601131135 and kindly provide your name, organization, position, and reason.)