Internet Police Popularization of Law: The Crimes Behind CryptoCurrency Transactions

On September 24, 2021, in order to further prevent and dispose of the risks of speculation in virtual currency transactions, and effectively maintain national security and social stability, the People’s Bank of China issued the “Notice on Further Preventing and Disposing of the Risks of Speculation in Virtual Currency Transactions.” The essential attributes of business activities are clearly defined.

Today, the editor will take everyone with you, starting from real cases, to understand what risks and criminal activities are hidden behind the virtual currency trading hype.

1. Wu Moujie and others are suspected of fund-raising fraud

In March 2021, the Jingtai County Public Security Bureau of Baiyin City, Gansu Province filed and investigated a case of fraud using YunSM digital currency based on clues handed over by the superior network security department, and arrested 33 suspects.

After investigation, Wu Moujie, Zhu Mouqing and others defrauded more than 80,000 fundraisers of more than 20 million yuan in the name of virtual currency investment, and also used the method of developing “linkage people” to self-launder and transfer fraudulent funds.

In September 2021, the Jingtai County People’s Procuratorate filed a public prosecution to the Jingtai County People’s Court in accordance with the law on suspicion of fundraising fraud, money laundering, and aiding information network criminal activities.

Internet Police Popularization of Law: The Crimes Behind CryptoCurrency Transactions

Why is this case suspected of fund-raising fraud? 

Answer: The suspect in this case, Wu Moujie and others, used virtual currency investment for the purpose of illegally occupying other people’s property, falsely claiming that the YunSM digital chain project is based on the background of the development of Li and the Ni team of the Chinese Academy of Sciences and is committed to solving the economy. large development projects and livelihood issues, lured investors to buy TEDA currency trading platform from virtual currency, Bitcoin and other virtual money into virtual currency wallet suspects in the address.

Internet Police Popularization of Law: The Crimes Behind CryptoCurrency Transactions

In order to demonstrate the strength of the team and the authenticity of the investment, the suspect also produced a promotional video, adding the P picture of the YunSM digital chain to the plane, high-speed rail, and representative buildings, and uploading it to the APP to trick users into registering for investment.

Internet Police Popularization of Law: The Crimes Behind CryptoCurrency Transactions

But the truth is that a part of the virtual currency defrauded by the criminal suspect was redeemed through offline “coin merchants” and then used for gang operations or direct distribution of the spoils. Part of the virtual currency invested in actual transactions was set up with a “lock-up” rule, and it was basically hopeless to redeem it. , The investment can be said to have gone without return. Therefore, this case is suspected of fund-raising fraud.

Why is this case suspected of money laundering?

Wu Moujie converted part of the virtual currency obtained from the fund-raising fraud into RMB 7.5 million and Hong Kong dollar 500,000 through offline “coin merchants” in Macau, Zhuhai and other places. His behavior is suspected of “Criminal Law Amendment (11)” 》The crime of money laundering.

Seventeen “Lianchuang people” knew that others committed financial fraud and used their real-name bank cards to pay for the settlement and transfer of funds and charged 3%-5% of the card amount. Their behavior was suspected of money laundering.

Internet Police Popularization of Law: The Crimes Behind CryptoCurrency Transactions

Why is this case suspected of helping information cybercrime activities?

The suspect in the case, Bao Mou, who knew that Wu Moujie’s criminal gang was engaged in illegal activities, still developed YunSM digital wallet APP for him, and continued to provide technical operation and maintenance at a later stage, and was suspected of helping information network criminal activities.

2. ” Ripple UnionPay” organization and leadership of MLM activities

In March 2021, the Pingchuan Branch of the Public Security Bureau of Baiyin City, Gansu Province received clues about the transfer from the higher-level cybersecurity department, and found out that Zhang, Wang and others set up their own ” Ripple Coin ” APP investment platform, and adopted members to donate coins, tiered dividends, etc. The method attracted more than 40,000 people from many places to participate, with a level of 10 or more, and invested more than 8 million “Ripple coins” with a value of more than 30 million. At present, the case is still under investigation.

Why is it suspected of organizing and leading MLM activities?

Zhang, Wang and others promoted “Ripple” through the Internet, requiring investors to purchase “Ripple”, and divided the investors into senior partners, intermediate partners, and junior partners according to the number of members and the number of Ripple purchased. According to the number of “Ripple Coins” purchased by the referring members, 10%, 8%, and 6% of the member’s investment amount will be rewarded, attracting a large number of investors to participate in a short period of time. Therefore, it is suspected of organizing and leading MLM activities.

Internet Police Popularization of Law: The Crimes Behind CryptoCurrency Transactions

Knock on blackboard

Four essential attributes of virtual currency transactions:

1. Virtual currency does not have the legal status equivalent to legal tender. The Law of the People’s Republic of China on the People’s Bank of China stipulates that the legal currency of the People’s Republic of China is Renminbi. The “Notice” pointed out that virtual currencies such as Bitcoin, Ether , and TEDA are not legally compensated, and should not and cannot be used as currency in the market.

2. Virtual currency-related business activities are illegal financial activities. Those who carry out related illegal financial activities constitute a crime shall be investigated for criminal responsibility in accordance with the law.

3. The provision of services by overseas virtual currency exchanges to Chinese residents through the Internet is also an illegal financial activity.

4. There are legal risks involved in virtual currency investment and trading activities. If investing in virtual currency violates public order and good customs, the relevant civil legal actions are invalid, and the losses caused by this shall be borne by them.

Today’s knowledge is a bit difficult, but it can help you avoid a lot of pitfalls. The Internet police once again remind you not to believe in false Internet propaganda, establish a correct investment philosophy, be alert to the use of virtual currency for fraud, pyramid schemes, money laundering and other illegal activities, and avoid your own property. Suffer a loss

Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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