The Truth and Warning of the "Hangzhou Investigation" Incident in the Encryption Industry

Recently, there has been new progress regarding the "Hangzhou investigation" incident circulating in the encryption community. After multiple verifications, including inquiries to relevant judicial authorities in Hangzhou and information obtained from other channels, it can be confirmed that the claim of the Hangzhou police systematically investigating encryption practitioners is false.

Event Timeline

On June 10, a social media user published an article titled "Hangzhou Police are Conducting Systematic Investigations on Cryptocurrency Practitioners," which attracted widespread attention in the industry. However, after thorough investigation and multiple verifications, this information has been confirmed to be false.

Event Truth

According to reliable sources, the actual situation is likely that a larger local encryption-related team in Hangzhou is involved in the case, suspected of being involved in foreign exchange-related crimes, which may constitute illegal business operations. The previously circulated information may have arisen from misunderstandings due to the cooperation of the individuals involved or witnesses with the public security authorities in the investigation.

According to reports, there are indeed local encryption industry practitioners in Hangzhou who have been missing for several days, and the size of the teams they belong to is not small. This further corroborates the speculation that specific teams are involved, rather than the entire industry facing a comprehensive investigation.

Warning to the Encryption Industry

Although the "Hangzhou investigation" incident has been confirmed as a false report, this incident still serves as a wake-up call for the encryption industry. Practitioners should pay attention to the following points:

1. Clarify regulatory red lines:

   • Prohibit the exchange of virtual currencies with fiat currencies
   • Prohibit the exchange between virtual currencies
   • Prohibited from acting as a central counterparty to trade virtual currencies
   • Prohibit providing information intermediary and pricing services for virtual currency trading
   • Prohibit token issuance financing and virtual currency derivatives trading
   • Prohibition of establishing exchanges and providing services to mainland residents
   • Prohibit providing services for overseas virtual currency exchanges
   • It is prohibited to name enterprises using terms such as "virtual currency", "virtual assets", "encryption currency", "encryption assets", etc.
   • Prohibit virtual currency mining activities

2. Response Strategies When Encountering an Investigation:

   • Clarify your role: Confirm whether you are being investigated as a witness or a suspect.
   • Note the investigation location: Witnesses can cooperate with the investigation at more flexible locations, while suspects usually need to be at designated places.
   • Attention to investigation time: The first investigation of a criminal suspect usually does not exceed 24 hours.
   • Check investigation procedures: ensure the legitimacy of the investigators' identity, relevant documents, and paperwork.

Conclusion

The regulatory environment for the domestic encryption industry is becoming increasingly strict. Practitioners need to be particularly cautious when disseminating information and should ensure its accuracy before publication. In case of legal issues, it is advisable to consult a professional blockchain legal advisor promptly to obtain appropriate legal guidance and protection.