In a groundbreaking case that garnered much attention in China, a student named Yang Qichao was sentenced to 4 years and 6 months in prison and fined 30,000 yuan ($41,000) for “fraudulently” issuing a cryptocurrency called BFF on the Binance BNB chain. .
The case, which took place in the People’s Court of Nanyang High-Tech Industrial Development Zone in Henan Province, marks the first criminal trial in China involving the issuance of a virtual currency. The Asian country has strict regulations which prohibit people from participating in the broadcast, in the negotiation, or invest in these assets.
Criminal trial for crypto fraud
According to local media reportsThe incident began in May 2022 when Yang Qichao, a senior student at a university in Zhejiang, created a digital virtual currency called “Blockchain Future Force” (BFF) on the Binance chain.
It is alleged that Yang Qichao injected liquidity into the currency and then withdrew the funds, leading to a significant depreciation in the value of BFF coins. One person, Luo, who purchased BFF coins, suffered losses of 50,000 USDT stablecoins from Tether (equivalent to approximately 330,000 RMB).
Yang Qichao’s defense lawyer argued that Luo, “an experienced participant” in the cryptocurrency field transactionsshould have been aware of the risks involved.
The lawyer claimed that Luo had a “clear understanding” of the speculative nature of crypto investments and recognized the lack of regulatory oversight of the industry.
The lawyer questioned whether Luo’s decision to trade 50,000 USDT coins for BFF coins results from an error of judgment, given that virtual currency transactions inherently carry investment risks.
Profitability amid alleged fraud
During the trial, the question of whether virtual currencies should be considered property protected by criminal law was also debated.
Although cryptocurrencies do not possess monetary attributes, the court recognized that they can be traded on international markets. platformsgenerating economic benefits and demonstrating undeniable real estate characteristics.
As a result, the court recognized the conversion of the 50,000 USDT coins into the country’s official currency, the yuan, as “a relevant factor” in determining the sentence.
Furthermore, the defense attorney pointed out that despite Luo’s initial allegation that he had been defrauded, subsequent analysis of his transaction records revealed a series of quick and profitable transactions. This led to the argument that Luo had actually profited from the investment, thus calling into question the notion of fraud.
According to the report, the case sparked a broader discussion about legal status and the regulation of virtual currencies in China. While the country’s legal policies do not yet fully recognize the legitimacy of virtual currencies, questions surrounding their issuance, trading and protection remain ambiguous.
The outcome of this case could serve as a precedent for future legal proceedings involving virtual currencies, thereby shaping the legal landscape in this emerging area.
Featured image from Shutterstock, chart from TradingView.com
