Rethinking Cryptocurrency Financial Behavior After the Plunge Storm

Recently there has been a lot of explosive news in the cryptocurrency world, and yesterday the whole market even saw an epic plunge, but people are still enthusiastic about decentralized investment, traditional financial organizations are starting to accept some organizational models and financial tools in the virtual world, and tycoons are intent on participating in the wave of decentralized investment to develop their own version of the world. Here, it is still necessary to splash some cool water and cool down your readers to prevent going into the abyss of crime, so we briefly analyze the possible criminal risks involved in decentralized investment models and discuss them with you.

Rethinking Cryptocurrency Financial Behavior After the Plunge Storm

I. What is a DAO

DAO is a new paradigm for decentralized investing that enables tens of thousands of people to deploy capital on a large scale, digitally, around the world.DAO aims to operate as a for-profit entity that creates and holds assets by selling DAO tokens to investors, which will then be used to fund “projects “. Investors who purchase DAO Tokens in other tokens and become holders of DAO Tokens will be able to share in the expected returns from these projects as a return on their investment in DAO Tokens. In addition, DAO Token holders can monetize their investment in DAO Token through resale.

II. Risk of constituting the crime of organizing and leading pyramid selling activities

The crime of organizing and leading a pyramid scheme is stipulated in one of Article 224 of China’s Criminal Law, which has a wide range of punishment, not only for organizers and leaders, but also for active participants. The key to constituting this crime is the way of operation. If the decentralized investment project, in the process of actual operation, exists in the name of marketing goods, providing services and other business activities, requiring participants to pay fees or purchase goods or services to obtain the qualification to join, forming a certain composition of the hierarchy, the basis of remuneration or rebate is the number of people developed, and eventually the project is difficult to maintain, resulting in the loss of users’ property, then there is a risk of constituting the crime of organizing and leading The risk of committing the crime of organizing and leading pyramid selling activities.

Third, the risk of constituting the crime of illegal absorption of public deposits, capital raising fraud, fraud

Although the general decentralized investment model absorbs tokens and not fiat money, there is still the possibility that tokens will be recognized as funds (refer to Sister Za’s previous article: Illegal Fund Raising! Although China is not a case law country, it does not prohibit the reasoning in the judgment with reference to the relevant case law, and the subsequent judicial interpretation may also include such views. Therefore, in the process of decentralized investment, if there is unapproved public propaganda, promising to repay capital and interest and absorbing funds from the public, in compliance with Article 176 of the Criminal Law, there will be a risk of constituting the crime of illegal absorption of public deposits; if there is illegal collection of funds using fraudulent methods, absconding with the funds or embezzling the funds with the purpose of illegal appropriation, in compliance with Article 192 of the Criminal Law If there is a risk of constituting the crime of capital raising fraud; if there is the act of fabricating false virtual currencies or virtual currencies with no development potential, taking advantage of the victim’s impulse to invest and inducing the victim to invest, in accordance with Article 266 of the Criminal Law, there will be a risk of constituting the crime of fraud.

Fourth, the risk of constituting the crime of unauthorized establishment of financial institutions and illegal operation

Referring to Article 4 of the now defunct Regulations of the People’s Bank of China on the Administration of Financial Institutions (Yinfa [1994] No. 198), the financial business refers to deposits, loans, settlements, insurance, trusts, financial leasing, bill discounting, financial guarantees, foreign exchange trading, financial futures, issuance and trading of marketable securities, as well as the illegal operation of financial institutions as determined by the People’s Bank of China. and trading and other financial business as determined by the People’s Bank of China; Article 3 of the Regulations, financial institutions refer to the following institutions established in the territory in accordance with legal procedures, operating financial business: (a) policy banks, commercial banks and their branches, cooperative banks, urban or rural credit cooperatives, urban or rural credit cooperatives and postal savings outlets; (b) insurance companies and their branches, the Insurance brokerage companies, insurance agents; (C) securities companies and their branches, securities trading centers, investment fund management companies, securities registration companies; (D) trust and investment companies, finance companies and financial leasing companies and their branches, financing companies, financing centers, financial futures companies, credit guarantee companies, pawnbrokers, credit card companies; (E) the People’s Bank of China identified other institutions engaged in financial business.

The decentralized investment model is considered to have the attributes of finance naturally, and such concept seems to be difficult to change, and the criminal law attaches more importance to the substantive interpretation, so even if they are not engaged in the same financial business, they may be substantially recognized as similar financial business and belong to other financial institutions under Article 174 of the criminal law. Therefore, without the approval of the competent state authorities, there is a risk of constituting the crime of unauthorized establishment of financial institutions. In contrast, the risk of illegal operation also comes with it. If the decentralized investment model has engaged in securities, futures or insurance business or illegally engaged in fund payment and settlement business without the approval of the competent state authorities, there will be the risk of constituting the crime of illegal operation as stipulated in Article 225 of the Criminal Law.

That’s all I have to share today, thanks to the readers!

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/rethinking-cryptocurrency-financial-behavior-after-the-plunge-storm/
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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