Supreme People’s Procuratorate of China, Tether (USDT) issued a warning against using stablecoin for currency exchange. According to Chinese authorities, using USDT to exchange local currency for a foreign currency is against the law.
China’s Supreme People’s Procuratorate issued a joint statement with the State Administration of Foreign Exchange (SAFE) on December 27. Document, Tether (USDTIt also calls for stricter measures against its use. The document states that using USDT to convert yuan into a foreign currency is illegal. Additionally, the agencies called on local branches to “punish fraudulent foreign exchange purchases, illegal foreign exchange transactions, and other illegal and criminal activities related to foreign exchange.”
Authorities also underlined that indirect participation, such as technical support or clearing services, is also illegal.
Zhao Dong, a Chinese national, was found to be facilitating crypto and local currency trading. Dong is also known as the founder of crypto trading desk RenrenBit. For his actions, Dong was fined $322,000 and sentenced to seven years in prison. The founder of RenrenBit was found guilty of using United Arab Emirates (UAE) dirhams to buy Tether (USDT) and reselling it for Chinese yuan in mainland China.
Another citizen was sentenced to nine months in prison for purchasing $13,067 worth of Tether (USDT) in August 2023.