In a groundbreaking case that attracted significant attention in China, a university student named Yang Qichao was sentenced to 4 years and 6 months in prison and fined 30,000 yuan ($41,000) for “fraud” in issuing a cryptocurrency called BFF on Binance’s BNB chain. .
The case, which took place in the People's Court of the Nanyang High-Tech Industrial Development Zone in Henan Province, represents the first criminal trial in China related to the issuance of a virtual currency. The Asian country has strict regulations that prevent people from engaging in issuance, trading, and trading. Or invest in these assets.
Criminal prosecution for crypto fraud
According to local media ReportsThe incident began in May 2022 when Yang Zhichao, a final-year student at a Zhejiang university, created a digital virtual currency called “Blockchain Future Force” (BFF) on the Binance Chain.
Yang Qichao allegedly injected liquidity into the coin and then withdrew the funds, causing the value of BFF coins to drop significantly. One individual, Luo, who bought BFF coins, suffered losses of 50,000 Tether USDT stablecoin (equivalent to about 330,000 RMB).
Yang Zhichao's defense lawyer argued that Lu is an “experienced participant” in the cryptocurrency space TransactionsHe should have been aware of the risks involved.
The lawyer emphasized that Lu had a “clear understanding” of the speculative nature of cryptocurrency investments and acknowledged the industry’s lack of regulatory oversight.
The lawyer wondered whether Luo's decision was interchangeable 50,000 USDT coins For BFF currencies resulted from miscalculation, since virtual currency transactions inherently carry investment risks.
Profitability amid alleged fraud
During the trial, the issue of whether virtual currencies should be considered protected property under criminal law was also discussed.
Although cryptocurrencies do not have the attributes of currency, the court recognized that they can be traded internationally Platformsachieving economic benefits and demonstrating undeniable ownership characteristics.
As a result, the court recognized the conversion of the US$50,000 coins into the country's official currency, the yuan, as a “relevant factor” in determining the penalty.
Furthermore, the defense attorney asserted that despite Lu's initial claim that he had been defrauded, subsequent analysis of his transaction records revealed a series of quick and profitable trades. This led to the argument that Lu had actually profited from the investment, calling into question the idea of fraud.
According to the report, the case has sparked a broader debate about… legal situation And regulation of virtual currencies in China. With the country's legal policies not fully recognizing the legality of virtual currencies, the issues surrounding their issuance, circulation and protection remain ambiguous.
The outcome of this case may set a precedent for future legal actions related to virtual currencies, shaping the legal landscape in this emerging field.
Featured image from Shutterstock, chart from TradingView.com