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

Recently, the "Hangzhou investigation" incident regarding the encryption industry has attracted widespread attention. After multiple verifications, including confirming with the relevant judicial authorities in Hangzhou and obtaining information from other sources, it can be confirmed that the so-called systematic investigation by the Hangzhou police on encryption practitioners is false information.

The Truth of the Event

According to reliable sources, a local large-scale encryption-related team in Hangzhou is involved in a case that may relate to foreign exchange crimes, likely constituting illegal business operations. Previously circulated information might have resulted from the involvement of suspects or witnesses cooperating with public security investigations. There are reports that certain practitioners in Hangzhou's encryption industry have been missing for several days, and these individuals are part of a relatively large team.

Therefore, it is speculated that the truth of the "Hangzhou investigation" incident is that there are local encryption-related teams involved, rather than conducting an investigation, inspection, or crackdown on the entire encryption industry.

Warning to the encryption industry

This event brings two important warnings to the encryption industry:

1. It is essential to understand the red lines set by mainland regulatory agencies.
2. How to respond if investigated by judicial authorities

regulatory red line

Currently, practitioners in the mainland encryption industry are prohibited from engaging in the following activities:

• Exchange of virtual currency and fiat currency
• Exchange between virtual currencies
• As a central counterparty for trading virtual currency
• Provide information intermediary and pricing services for virtual currency trading
• Token issuance financing and virtual currency derivatives trading
• Set up an exchange and provide services to mainland residents
• Provide services for overseas virtual currency exchanges
• Use terms like "virtual currency", "encryption currency" in the company name.
• Virtual currency mining activities

It is important to note that although the relevant notice lists the above red lines, it does not specify clear legal consequences. In criminal cases, the principle of legality must still be strictly adhered to.

response strategies during investigation

If you unfortunately encounter criminal legal issues, you can refer to the following suggestions:

1. Clarify your situation: Understand whether you are being investigated as a witness or a suspect.
2. Pay attention to the investigation location: witnesses may cooperate with the investigation at more flexible locations, while criminal suspects usually need to cooperate at the investigating authority.
3. Attention to the investigation time: For criminal suspects, the first investigation time generally does not exceed 12 hours, and the maximum shall not exceed 24 hours.
4. Verification and investigation procedures: Ensure that the personnel, summons, search warrant, and other procedures are complete.

Conclusion

The domestic encryption industry practitioners face a severe survival environment. It is essential to be cautious when disseminating information, and it is best to publish only after verification. In case of legal issues, it is advisable to consult a professional blockchain lawyer promptly.