crime? Overseas licensed institutions help domestic high-net-worth individuals buy coins

Recently, some overseas legally licensed companies have carried out virtual currency sales business in China (hereinafter referred to as “sale business”): customers first purchase virtual currency in RMB from the institution, and then entrust the company to use virtual currency to purchase assets or foreign legal currency overseas . Is there any criminal legal risk to this behavior? Sister Sa’s team will answer this question in today’s article.

crime? Overseas licensed institutions help domestic high-net-worth individuals buy coins

1. Prerequisite confirmation

Before analyzing the main issues in this article, there may still be some doubts: According to the newly released “Notice on Further Preventing and Disposing of the Risk of Virtual Currency Trading Hype” (hereinafter referred to as the “Notice”), all business activities related to virtual currencies are Illegal financial activities, of course, have criminal legal risks. Is there any reason for this?

In this regard, we believe that although the “Notice” Article 1 paragraph 2 stipulates that “virtual currency-related business activities are illegal financial activities”, it cannot be directly determined as a criminal offence. This is because the effectiveness of the “Notice” is only the rules of the ministries and commissions and cannot reach the level of national regulations. Therefore, even if some behaviors violate the provisions of the “Notice”, it cannot be regarded as a violation of national regulations in the criminal law, and virtual currency-related business activities cannot be criminalized. sex. From the last sentence of this paragraph in the “Notice”, “Those who carry out related illegal financial activities constitute a crime shall be investigated for criminal responsibility in accordance with the law .” Therefore, to determine whether a business activity related to virtual currency constitutes a crime, it should still be determined from the specific criminal law.

crime? Overseas licensed institutions help domestic high-net-worth individuals buy coins

2. Crimes of illegal business operations involving criminal risks

The crime of illegal business operations stipulated in Article 225 of the Criminal Law is often referred to as “pocket crime” because it has a seemingly useful general clause, that is, “other illegal business activities that seriously disrupt market order.” As long as the above-mentioned sales business can be identified as “other illegal operations that seriously disrupt market order”, then it can be evaluated as the crime of illegal operations.

But in fact, the constitutional elements of this crime require “violation of national regulations.” Only when the sales business violates national regulations, it is necessary to judge whether the behavior is the four acts listed in the crime of illegal business operations, otherwise it can be directly Eliminate the criminal risk that constitutes the crime of illegal business operations. As mentioned earlier, violating the “Notice” does not constitute a violation of national regulations. Therefore, the sales business is not illegal because of the possibility of violating the “Notice”, and there is a criminal risk of illegal business operations.

From the perspective of the sales business itself, although its business is realized with the help of virtual currency, the virtual currency is more like a tool in the process. This business can essentially be interpreted as the conversion of domestic legal currency RMB into virtual currency. Purchase foreign legal currency or directly purchase foreign assets abroad. Obviously this behavior may involve foreign exchange control issues. According to the Supreme People’s Court of the Supreme People’s Court of 2019, the “Interpretation on Several Issues Concerning the Application of Laws in Handling Criminal Cases of Illegal Fund Payment and Settlement Business and Illegal Foreign Exchange Trading”, “Illegal foreign exchange transactions such as buying and selling foreign exchange in violation of national regulations, or in disguised foreign exchange trading, etc. , Disrupting the order of the financial market, the circumstances are serious, in accordance with the provisions of Article 225, Paragraph 4 of the Criminal Law, convicted and punished for the crime of illegal business operations”, the act of buying and selling foreign exchange in a disguised form can be evaluated as illegal business activities. Moreover, according to Article 45 of the “Regulations on Foreign Exchange Administration of the People’s Republic of China,” the act of disguised buying and selling of foreign exchange itself is a violation of the regulations, and this regulation is an administrative regulation, and violating this regulation meets the requirements of violation of national regulations. Therefore, as long as the sales business can be evaluated as a disguised form of foreign exchange trading and meets other constitutive requirements (such as serious circumstances), then it can constitute the crime of illegal business operations.

Although the practice of disguised foreign exchange transactions is mostly in the form of repaying RMB in foreign currency or repaying foreign exchange in RMB, or swapping foreign exchange and RMB, for example, Party A owes the casino $1,000 and is instructed by the casino to use RMB of the same value for repayment. models, the behavior can be evaluated as a disguised trading behavior, however, the so-called “de facto” means “contents remain unchanged, and the original form different”, if the sale of the business to be found in real terms, there is the business finds In order to realize the possibility of exchange between RMB and foreign currency. Therefore, although there is basically no punishment for this kind of behavior at this stage, there is still a criminal risk that constitutes the crime of illegal business operations.

crime? Overseas licensed institutions help domestic high-net-worth individuals buy coins

3. Money laundering crime of criminal risk

As mentioned in the previous official account, due to the anonymity, decentralization, difficulty of tracking, and global circulation of virtual currency, criminals may use virtual currency to launder money. The sales business just happens to be able to convert the money into virtual currency in a reasonable way, and use the virtual currency to purchase assets or purchase foreign legal currency abroad, so it can actually be used by criminals to achieve their money laundering purposes. The recent frequent cases of money laundering through virtual currency have further confirmed the role of virtual currency in the money laundering process. Therefore, in the process of the existence of the sales business, there may be criminals who participate in the sales business to achieve their money laundering. Purpose.

According to the provisions of Article 191 of the Criminal Law, the sales business of an enterprise actually has the effect of the “cross-border transfer of assets” as stipulated in the article, so it satisfies the constitutive requirements of the crime of money laundering objectively. The characteristics of virtual currency also make it more difficult to identify the source and nature of the money, which is also in line with the essence of money laundering crime. Therefore, as long as the company knows that the money belongs to the specific criminal proceeds and its proceeds subjectively, the sales behavior of the company constitutes a crime of money laundering, and the company will face corresponding criminal risks. In practice, it is often only necessary for the company to recognize that there is an abnormality in the source of the customer’s funds, so that the known existence can be presumed. Therefore, if the company does not conduct adequate review, the sales business will have a greater criminal risk of money laundering.

crime? Overseas licensed institutions help domestic high-net-worth individuals buy coins

Four, write at the end

Although this article only suggests two criminal risks for the sales business, it does not mean that there are no other criminal risks for the behavior. In fact, whether it is the crime of helping information cybercriminals in Article 287 bis or The crime of concealing, concealing criminal proceeds, and proceeds from criminal proceeds of Article 312 is still a possible criminal risk involved in the business. For the above- mentioned various risks, companies should conduct qualified and complete qualification reviews on customers when providing business activities, have a general understanding of their funding, and always pay attention to national policies and actively respond to national calls. Only in this way can business activities be carried out in compliance with laws and regulations.

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