Chinese university students distributing meme tokens and then withdrawing Liquidity = 4 years imprisonment! Be careful of falling into the "minefield" of the crypto world, or you might end up in jail.

This article combs through a number of cryptocurrency-related judicial cases in China in recent years, and analyzes crimes such as illegal operation, money laundering, fraud, and pyramid schemes. Through real judgments, it reveals the serious legal risks and criminal liabilities behind acts such as coin issuance, OTC trading and theft of crypto assets. This article is based on an article written by Wenser and compiled, compiled and contributed by Odaily. (Synopsis: China's "stablecoin blocking order" wants people not to discuss: strangle the ghost of the dollar, quietly build the RMB ark in Hong Kong) (Background supplement: Why is China's encryption ban "repeatedly banned"? Looking back at the 10-year evolution of fake news in the crypto market) The cryptocurrency industry has always been a dark forest, both to guard against on-chain security threats and to be wary of real-world legal swords. Especially for young people who are not deeply involved in the world, the criminal risk boundaries behind coin issuance, OTC trading, and manipulation of liquidity pools are often blurred. In order to enhance the awareness of risk prevention, Odaily Planet Daily will sort out typical domestic currency-related judicial cases in recent years and analyze key legal risk points (Note: This article is only for legal reference and does not constitute legal advice, and the specific terms are subject to official interpretation) Crime 1: Reselling foreign exchange constitutes the crime of illegal operation, and the amount involved exceeds 200 million yuan According to a typical case released by the SPC, the Sichuan Leshan Intermediate Court upgraded the trial of a case of illegal trading of foreign exchange using USDT. From 2020 to 2021, Wan Mouyuan and others illegally traded foreign exchange through the "RMB-USDT-USD" method, and the amount involved exceeded 234 million yuan. The court found that it constituted the crime of illegal operation, and the main culprit, Wan Mouyuan, was sentenced to 13 years and 6 months in prison and fined 1.14 million yuan; The defendants Huang Mouyuan and Chen Mouwen committed the crime of illegal business operation and were sentenced to fixed-term imprisonment of 5 years and 6 months and 2 years and 6 months respectively, and fined RMB 710,000 and RMB 250,000. After the first-instance verdict was pronounced, the defendant accepted the judgment, but the procuratorate did not protest, and the judgment has taken legal effect. Two other cases are also crimes of illegal business operation, which are listed here: First, in December 2022, the Tai Po County People's Court pronounced a verdict on a cash trading virtual currency case, sentencing the main culprit Chen to eight months' imprisonment and a fine of 20,000 yuan for the crime of illegal business operation; The accomplice Li was sentenced to six months and ten days in prison and fined 1,000 yuan; The stolen funds of 5101770 yuan shall be confiscated in accordance with the law and turned over to the state treasury. It is reported that in November 2021, Chen started the business of buying and selling virtual currencies in cash, buying USDT from retail investors in the currency circle he knew, and then reselling it to the acquirer to earn the price difference. The price of each transaction is set by the acquirer, who compares the price of 1 U coin with the price of other virtual coins on the day to calculate the earned price. Because each transaction involves a large amount of cash, Chen is afraid of being robbed, so he hires Li to escort the cash traded with retail investors as a bodyguard. After trial, the court held that Chen and Li used the form of buying and selling virtual currency to buy and sell foreign exchange in disguise, and the circumstances were serious and constituted the crime of illegal operation. Second, the three "post-95" guys used virtual currency trading as a medium to engage in the "business" of buying and selling foreign exchange, completing more than 650 transactions in just a few months, exchanging nearly 30 million yuan in foreign exchange. After the Jianhu County Procuratorate initiated a public prosecution, Lin and the other three were eventually sentenced by the court to fixed-term imprisonment ranging from 5 to 1 year and 6 months for the crime of illegal business operation, and each was fined. The procurator held that Lin and the other three used virtual currency as a medium to provide cross-border exchange and payment services to earn exchange rate differences, which used the special attributes of virtual currency to bypass national foreign exchange supervision, affected the effectiveness of foreign exchange management and the stability of the legal exchange rate, disrupted the normal order of the financial market, and should be investigated for criminal responsibility for the crime of illegal business operation according to law. Odaily Planet Daily Comment: As we all know, domestic foreign exchange control regulations limit the annual exchange amount of individuals to about 50,000 US dollars, and the decentralization and anonymity of cryptocurrencies provide certain convenience for foreign exchange processing and transactions, so there are certain legal risks. In the first case, the amount of money involved was huge and the time span of the crime was long, so it was regarded as a typical case of elevated jurisdiction with accurate application of law, appropriate adjudication orientation, and outstanding exemplary significance. The situation in the second and third cases is similar, but the corresponding penalties are relatively lighter for reasons of relatively minor circumstances. Crime 2: Money laundering, bank turnover of 25,000 yuan, illegal profit of more than 5,000 yuan The People's Court of Liyang City, Jiangsu Province, handed down a judgment on a virtual currency money laundering case on July 26, 2024. An unemployed man with the pseudonym Xiao Wu was sentenced to six months in prison, suspended for one year, and fined RMB 2,000 for participating in virtual currency money laundering activities. According to the case, in November 2023, Xiao Wu contacted a "money laundering company" through Telegram in order to repay credit card debts owed during college for investing in foreign exchange and virtual currency. HE BUYS U COINS ON THE TRADING PLATFORM AND THEN TRANSFERS AND SELLS THEM THROUGH THE "U-MATOU" APP TO EARN THE SPREAD. On December 22, 2023, the Zhongguancun Police Station of the Liyang Public Security Bureau received a report from the public that they had been defrauded of 3,830 yuan by "brushing orders". After preliminary investigation by the public security organs, 2,520 yuan was credited to Xiao Wu's bank card, involving Xiao Wu's bank card. After investigation, Xiao Wu's bank account had a total of 13 transactions, totaling more than 25,000 yuan, and the individual illegally made more than 5,000 yuan. Odaily Planet Daily Sharp Comment: Money laundering is also one of the high-frequency crimes in the cryptocurrency industry, whether domestic or overseas, regardless of the scale and background of the people involved, there are certain risks of money laundering, especially individuals who help illegal companies at home and abroad to transfer funds through their bank cards, which can easily constitute the crime of aiding trust. Charge 3: Fraud, post-00s college students withdrew liquidity in seconds after issuing Dogecoin, sentenced to 4 years and 6 months in prison and fined 30,000 yuan Yang Qichao, a post-00s college student, issued a "native dogecoin" BFF on BNB Chain, and was convicted of fraud by the People's Court of Nanyang High-tech Industrial Development Zone, Henan Province, and sentenced to 4 years and 6 months in prison and fined 30,000 yuan due to the loss of 50,000 USDT due to the withdrawal of liquidity, and was sentenced to 4 years and 6 months in prison and fined 30,000 yuan. On May 20, 2024, the case opened in the second instance of the Nanyang Intermediate People's Court. Yang Qichao's defense lawyer still defended his innocence, arguing that the virtual currency issued by Yang Qichao, the defendant in this case, had a unique and immutable contract address, and there was no so-called "counterfeit currency", and the defendant and the informant were both senior players in the cryptocurrency circle, and they had a clear understanding of the risk of speculating on virtual coins. In addition, the platform allows liquidity to be added or withdrawn at any time, and the defendant's actions do not violate the platform rules. The BFF coins held by the victim appreciated due to the increase in liquidity after the case, and if the transaction can redeem more USDT coins than before, the victim does not have any loss. Yang Qichao, born in 2000, was a graduating senior at a university in Zhejiang before the crime. In early May 2022, he paid attention to an autonomous organization called the District Movement Future DAO community, which carried out preliminary publicity and warm-up for the issuance of decentralized virtual tokens. He created a token BFF with the same English name as the future of the district, adding 300,000 BSC-USD and 630,000 BFF liquidity. In the same second that Yang Qichao added liquidity, Luo spent 50,000 USDT for 85316.72 BF...