Will the OTC be sentenced for such an operation?

OTC is a common way for the circulation of virtual currency. After my country’s laws have warned of risks and denied the legal currency status of virtual currency, they have not set independent legal regulations in the circulation link.

While doing legal research recently, a case published this year caught our attention: the criminal was found guilty of illegal business operations for selling cryptocurrencies to specific subjects. We will briefly analyze the cases below.

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Later, Yu, Hong 1, Hong 2 and others successively introduced or helped their relatives to buy virtual digital currency from the defendant Zeng. The above-mentioned total amount is more than 664,000 yuan. Among them, the defendant Zeng transferred 242,379 yuan to Shang through the bank to help Yu and others purchase virtual digital currency, and transferred 10,000 yuan to Shang through WeChat to help Yu and others purchase virtual digital currency.

Virtual digital currency, worth 23040 yuan.

On September 28, 2018, Zeng was criminally detained by the Jinxi County Public Security Bureau on suspicion of fraud; on November 3, 2018, he was arrested by the Jinxi County People's Procuratorate on suspicion of illegal business operations. The bureau executes the arrest.

case focus

1. Whether Zeng's behavior of selling virtual currency violated state regulations to the extent of seriously disrupting the order of the market economy.

2. Whether the virtual currency over-the-counter transaction meets the constituent elements of the crime of illegal business operation.

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verdict

The People's Procuratorate of Jinxi County charged the defendant Zeng Jiankang with the crime of illegal business operation in Jin Xing Su (2019) No. 66 Indictment, and filed a public prosecution with this court on April 16, 2019.

The defendant, Zeng Mou, refused to accept and appealed.

On September 24, 2019, the Intermediate People's Court of Fuzhou City, Jiangxi Province made a criminal ruling (2019) Gan 10 Xing Zhong No. 223, rescinding the original judgment and remanding it for retrial.

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Judgment Analysis

In the discussion part of the court of first instance, the court pointed out that "the defendant knew that the virtual digital currency he held could not be sold in China, but he still sold it to others, which seriously disrupted the market economic order. The facts of the crime are clear and the evidence is sufficient. crime.” However, in the entire judgment, the court did not clarify the specific national regulations that Zeng’s OTC behavior violated, but only matched it with the crime of illegal business operations that seriously disrupted the order of the market economy, which is too insufficient to discuss. In fact, the characterization and restrictions of virtual currency in my country's current laws are mainly derived from two departmental regulations: one is the "Notice on Preventing Bitcoin Risks" issued on December 3, 2013, and the other is the "Notice on Preventing Bitcoin Risks" issued on September 4, 2017. The "Announcement on Preventing Financing Risks of Token Issuance" issued by The former points out that Bitcoin, as a virtual currency, is a virtual commodity, but it cannot be circulated as currency. The latter clarifies the prohibitive regulations on the issuance and financing of virtual currency. The above regulations do not restrict the holding of virtual currency and the circulation of virtual currency among private individuals. Needless to say, the level of effectiveness of departmental regulations cannot reach the level of national regulations in the sense of criminal law. Therefore, based on the OTC facts identified in this case, we believe that Zeng’s objective behavior of selling virtual digital currency does not meet the criminal constitution of the crime of illegal business operations, and the court made mistakes in reasoning and law application.

Extension

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