The latest criminal risk notice for digital currency mining farms

Since the 11th department implemented the “Notice on Rectifying Virtual Currency “Mining” Activities on September 24 last year, in addition to the administrative penalties imposed by various regulatory departments on individuals and enterprises that illegally mine, some criminals are suspected of committing crimes. Mining behavior has also entered the field of investigation agencies in various places, and it is not uncommon for inter-provincial arrests in recent days. For friends in the mining circle to fully understand the red line of their own behavior, Sister Sa team will share common crimes in domestic mines through this article for readers’ reference.

Understanding of Strike Scope

Before sharing the charges, the concept needs to be clarified. Many friends seem to think that the 924 document only targets domestic bitcoin mining or similar virtual currency mining that lacks application scenarios, but this is not the case.

Even if it is a virtual currency with specific application scenarios, its behavior is still in line with “the process of producing virtual currency through a dedicated mining machine.” From the perspective of law enforcement agencies and judicial agencies, the application scenario is only a shell that contributes to the speculation and appreciation of virtual currency. In addition, the risks derived from the production and trading of virtual currency are becoming more and more prominent. The essence of mining behavior is still low in contribution to the national economy. , projects that have a limited role in promoting industrial development and scientific and technological progress should withdraw from domestic projects.

Reasons for common crimes


Most mining farms are also responsible for selling mining machines, computing power and hosting. Therefore, in the process of purchasing mining machines or computing power and obtaining virtual currency, users cannot check and confirm the status of mining machines and computing power in real time.

If the mining farm fictitious computing power and mining machines, and at the same time pays virtual currency on time, and uses the funds delivered by the user based on misunderstanding, the relevant responsible personnel of the mining farm may constitute a crime of fraud. With the same amount of money involved, the crime of fraud often has the highest sentence. Therefore, even if you are behind bars, how to get out of the crime of fraud is the key to defense.

Organizing and leading pyramid selling activities

According to the law and judicial interpretation, the composition of this crime in the operation of the mine needs to meet the requirements of charging a threshold fee, the level is above the third level, the number of people is more than 30, the payment is based on the number of developers, and the defrauding of property and other conditions.

What is worth analyzing is the issue of “team remuneration”. Most mines are not remunerated by the number of people they develop, but based on sales performance. The calculation and payment of online remuneration based on the sales performance of the downline belongs to the “team remuneration” type of pyramid selling activities. Simple “team-based” pyramid selling activities for the purpose of selling goods and based on sales performance, shall not be treated as a crime. However, it is essentially a pyramid selling activity that “uses the number of development personnel as the basis for remuneration or rebate”, and should be convicted and punished for the crime of organizing and leading pyramid selling activities.

For the substantive understanding, in addition to the subjective aspect of the seller, we believe that it also depends on whether the buyer intends to purchase the mining machine computing power: whether the buyer wants to buy the sales qualification, or the mining machine and computing power itself.

crime of illegally absorbing public deposits

The crime of illegally absorbing public deposits punishes the act of absorbing funds publicly for capital operation without a financial license. Because mining machines and computing power have a mechanism to generate virtual currency to obtain income, especially computing power has a tendency to be a financial product similar to asset packages, in practice, some judicial organs will choose this crime as the legal basis to censure the relevant actors. .

However, Sister Sa’s team still has doubts about the composition of the charge. When determining illegality, the behavior must violate the relevant provisions of the current effective financial management legal system in China . The sale or custody of mining machines and computing power is not within the scope of this provision. The legislative purpose of the 924 document is energy protection, and there is no direct connection with the financial management legal system.

Article 2 of the Interpretation of the Supreme People’s Court on Several Issues Concerning the Specific Application of Law in the Trial of Criminal Cases of Illegal Fund-raising Proposes a number of situations that constitute illegal fund-raising in the form and means of physical sales. The Judicial Interpretation clearly stipulates that, secondly, even if the behavior is adjusted by the bottom line, it is also required that such behavior does not have the real content of commodity sales or the main purpose of commodity sales. The sales of mining machines and equipment in mines are commodity sales with real content, and it is a bit far-fetched to include this into the category of illegal fundraising.

crime of illegal business

As a basic crime of economic crime, this crime is temporarily included in the category of consideration, but in fact, the sale of mining machines and computing power is difficult to constitute the crime of illegal business operation. The reasons are as follows: First, the crime of illegal business operation is based on “violating national regulations” As a premise, the 924 document is a departmental regulation, and its effectiveness level has not reached the administrative regulation or above, and does not belong to the category of “national regulations” defined by the judicial interpretation. Second, the sale of mining machines and computing power is not among the illegal business operations listed in the crime of illegal business operation, and the interpretation of the bottom line terms needs to be reported to the Supreme Court for approval. Therefore, Sister Sa’s team will not go into details on this crime.

Normative advice

In accordance with China’s regulations on the mining industry, Sister Sa’s team has compiled several suggestions here for the reference of relevant personnel:

1. The 924 document regulates domestic mining activities that waste my country’s energy, and individual mining outside the country is not within the scope of the attack;

2. The sale of mining machines to individuals who mine overseas does not violate the legislative purpose of the 924 document;

3. The failure of overseas merchants to provide mining services to Chinese residents can cut off the connection point under the jurisdiction of my country’s criminal law;

4. Individuals who already have criminal risks should do a good job in the preservation of criminal evidence on the basis of understanding the relevant charges and procedures.

write at the end

From an objective point of view, mining projects with specific scenarios such as IPFS do have great value in terms of data storage, etc. It may be inappropriate to generalize them as backward industries that should be attacked just because of the production of virtual currency. Compared with a one-size-fits-all attack, classifying the mining industry and formulating detailed legal policies is the path to rational and full utilization of China’s resources.

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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