Judicial Determination Logic Analysis of Crimes Related to Virtual Money

1. Overview

After studying a large number of criminal cases related to Virtual Money, it can be found that judicial authorities have some "unwritten rules" or path dependence in their conviction standards when handling such cases. This article will explore how certain common behaviors related to coin are determined to constitute a crime in judicial practice.

2. Typical Cases

In April 2020, the Zhejiang Provincial High Court made a ruling on a fundraising fraud case. The case involved various business models such as coin issuance, promotion, marketing, and ICO. The peculiarity of the case lies in the fact that the main perpetrator, Xia Moumou, and others were initially sentenced to probation by the Hubei Zhongxiang City Court for organizing and leading pyramid schemes, but later the Hangzhou Intermediate Court revoked the original ruling, re-sentencing them for fundraising fraud with life imprisonment. The Zhejiang High Court dismissed the appeal, upholding the ruling of the Hangzhou Intermediate Court.

This case involves the conviction logic of pyramid scheme crimes and fraud-related crimes, which is worth深入研究.

III. Types of Coin-Related Crimes and Conviction Logic

( One ) the legality of Virtual Money trading issues

Since the announcement by seven ministries in September 2017 to prevent the risks of token issuance financing, conducting token issuance in China has been regarded as illegal public financing behavior, suspected of illegal fundraising and other criminal activities. Even virtual money issued overseas is considered a virtual concept due to the lack of national recognition and actual economic value.

In the case of Xia Moumou, the court held that the actions of the issuer (seller) of the virtual money trading platform were in violation of regulations and laws, but it did not clarify whether ordinary participants (buyers) were in violation.

( Common Types of Coin-related Crimes

1. Fraud-related crimes (Fraud, Contract Fraud, Fundraising Fraud)
2. Pyramid Scheme Crime
3. Establishing casino crimes
4. Crime of Illegal Business Operations

) ### three ( conviction logic of crimes involving coin.

For example, the crimes of pyramid schemes and fundraising fraud:

1. The elements of pyramid scheme crimes:

   • Set thresholds to attract participants
   • Use the number of developers as the basis for calculating compensation
   • The pyramid scheme has reached more than three levels and has more than thirty participants.
   • The actor's purpose is to defraud participants of their property.

2. The Conviction Logic of Fraud-related Crimes:

   • The perpetrator disposes of property by causing the victim to have a mistaken belief.
   • The rights of the property owner are damaged
   • The actor obtains the property of others

In virtual money cases, judicial authorities often see air coins as tools for fraud, used to exchange for mainstream coins.

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4. Conclusion

Although there is currently no explicit ban on investing in Virtual Money in the country, judicial authorities may enforce the law or take legal action based on the reason of "suspected disruption of financial order and endangering financial security." There may be differences in the understanding and implementation of relevant regulations in different regions, which is particularly evident in the field of cases involving Virtual Money.

Investors should fully recognize the legal risks of virtual money investments and participate in related activities with caution. At the same time, industry insiders should closely monitor regulatory trends and judicial practices to better grasp the compliance boundaries.

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