If fraud occurs in personal digital currency transactions, does the platform constitute the crime of assisting information network criminal activities?

Author: Zeng Jie, a financial crime defense lawyer, senior partner of Guangqiang Law Firm and director of the Illegal Fund Raising Case Defense and Research Center

Lu Jiepei, a core lawyer at Guangqiang Law Firm’s Illegal Fund Raising Case Defense and Research Center

Although the state does not prohibit individual investment and trading in digital currencies , it does not protect them either. There are multiple risks in digital currency trading, including the risk of false assets, business failure, investment speculation, etc. Investors must bear the investment risks themselves. Therefore, in a large number of civil disputes caused by C2C transactions or OTC transactions, many courts will not provide relevant protection for related investment risks and require both parties to bear the risks themselves.

However, once a criminal offense occurs, the state will not condone the illegal and criminal activities that it should have jurisdiction over. Therefore, if fraud crimes occur due to investment and trading, the police will punish them according to law. In recent years, police in various places have investigated and dealt with many illegal and criminal activities carried out on digital currency trading platforms (such as fraud, pyramid schemes, etc.), such as fraud in the transaction process, or defrauding others of money in the name of purchasing digital currency on behalf of others, etc. Most of these cases are classified as fraud, and the main body of the fraud is generally the customers on the platform, but whether the platform itself that provides trading services will constitute an accomplice to the crime of fraud or related crimes, or the crime of assisting information network criminal activities, has become a topic of concern to many people.

Circumstances constituting a crime :

From the perspective of the platform, if it provides C2C transaction services between customers, this service belongs to the function of an information display platform and external supervision of the transaction process, and the platform generally does not participate in the transaction itself. If there are related suspected criminal fraud, embezzlement and other behaviors in the C2C transaction, it is generally a criminal act of customers against customers, and the service provided by the platform itself is neutral.

However, if the individuals or organizations that commit crimes such as fraud/pyramid schemes collude with the platform, and the platform is aware that others are using the platform's trading rules to commit fraud or other crimes, the neutral service provided by the platform itself has been changed, and may be deemed to intentionally provide substantial assistance to the criminal acts of others, thereby constituting an accomplice to the relevant crime or the crime of assisting information network criminal activities (the author will discuss how to distinguish between the two crimes in subsequent columns).

Therefore, whether there is collusion or knowledge is very important for the platform operators.

However, if the platform operators were not subjectively aware of the situation, and the services they objectively provided did not involve any special functions such as anonymous transactions, fictitious scenarios, etc. that were specifically designed to facilitate fraud, and if they had also undergone relatively strict KYC audits and had relevant prevention and reporting measures for fraudulent transactions and other behaviors, then it cannot be determined that the platform had the subjective intent to commit a joint crime.

From the perspective of evidence, if the investigating agency determines that the platform needs to bear criminal responsibility, the key evidence is whether the platform operators knowingly provided assistance or conditions for the fraud between related customers. For this issue, the confessions of the platform’s supervisors and direct persons in charge, the confessions of people related to the fraud crime, etc., will become the most direct evidence. The platform’s operating model, capital flow, etc. will become relatively indirect evidence, such as transaction fees, customer complaints and fraud incident handling procedures, etc. If it is to be used as evidence to prove guilt, it is necessary to observe whether it can prove whether the conditions of "criminal intent/assisting others with criminal intent" alleged by the investigating agency exist. (Weiyang.com)