Chinese authorities are intensifying their efforts to curb the use of cryptocurrencies like Tether (USDT) in foreign exchange trading, more than two years after implementing a comprehensive crypto ban.

The Supreme People’s Procuratorate (SPP), China’s top legal prosecution agency, has issued a warning against using USDT as an intermediary for trading Chinese yuan with other currencies. On December 27, the SPP and the State Administration of Foreign Exchange (SAFE) released a joint statement urging stricter enforcement against the use of Tether in cross-border transactions.

The statement declared that utilizing Tether as an exchange medium between domestic and foreign currencies is illegal. Local authorities were instructed to enhance coordination to punish illegal foreign exchange transactions and related criminal activities in accordance with the law.

The crackdown extends to any involvement in cryptocurrency exchange against the yuan, including indirect activities like providing technical support or exchange services.

The statement also referenced the case of Zhao Dong, founder of the over-the-counter crypto trading platform RenrenBit, who was sentenced to seven years in prison and fined 2.3 million yuan ($322,000) for facilitating crypto and local currency trades. Zhao was found guilty of using United Arab Emirates dirhams to buy USDT and reselling it in China for yuan.

This move comes as part of China’s ongoing crackdown on crypto activities following its 2021 ban on cryptocurrency trading and mining. Despite these restrictions, Tether and other cryptocurrencies have remained popular in China. In 2022, a Beijing court ruled that stablecoins like USDT cannot be used for salary payments, reinforcing the country’s strict stance on crypto.

Local reports indicated that, as of October 2022, China’s crypto market was still one of the largest globally, with the country ranking as the second-largest Bitcoin mining hub.