Chinese authorities are moving to crack down on the use of cryptocurrencies like Tether (USDT) in foreign exchange trading more than two years after enforcing a major crypto ban.

China’s Supreme People’s Procuratorate (SPP) — the highest national agency responsible for legal prosecution in mainland China — has warned the public against using USDT as an intermediary to trade Chinese yuan with other fiat currencies.

The agency issued a joint statement with the State Administration of Foreign Exchange (SAFE) on Dec. 27, urging local officials to implement stricter measures against Tether stablecoin use in cross-border foreign exchange transactions.

In the statement, the SPP and the SAFE declared that using Tether as a medium of exchange between the local and foreign currencies is illegal. The authorities said their local branches should improve 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.

The Chinese authorities emphasized that any activity involving cryptocurrency exchange against yuan is illegal, including indirect involvement such as technical support or offering exchange services.

The statement mentioned a criminal case involving Chinese citizen Zhao Dong — the founder of the over-the-counter crypto trading desk RenrenBit — who was found to have facilitated crypto and local currency trading. The trader was jailed for seven years and fined 2.3 million yuan ($322,000) for using United Arab Emirates dirhams to buy USDT and resell it in mainland China for yuan.

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The news comes more than two years after mainland China authorities placed a major ban on cryptocurrency activities in the country, including trading and mining. Local agencies have been cracking down on Tether transactions since, with local enforcement sentencing one citizen for nine months on charges of purchasing 94,988 Chinese yuan ($13,067) worth of Tether in August 2023.

Despite China enforcing its massive crypto ban in 2021, cryptocurrencies like Tether apparently remained popular in China, at least for a while. In 2022, Beijing’s Chaoyang District People’s Court reportedly ruled that stablecoins like USDT cannot be used for salary payments after one firm illegally paid an employee using USDT.

According to local reports, China’s crypto market was still among the world’s strongest as of October 2022, as mainland China returned as the second top Bitcoin mining hub.

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