Questions to be answered: Why is the crime of opening a casino a high-risk crime in China’s cryptocurrency industry? How can we prevent it?

Abstract: This year, the Ministry of Public Security of China has cracked down on cross-border gambling and telecommunications fraud. The cryptocurrency industry in China has been severely cracked down on because it is used by criminals as a channel for deposits and withdrawals. In terms of specific aspects, the first is the gambling APP on the public chain; the second is to provide cryptocurrency exchange and OTC services for online casinos.

Senior criminal lawyers pointed out that providing technical support, funding channels, advertising services, etc. for online gambling can also be a crime; industry professionals should avoid taking chances, strengthen vigilance and research, and avoid being involved as an accomplice or in downstream crimes .

Statement: This article is exclusively authorized to be edited and reprinted by "Wu Says Blockchain".

Recently, it has been reported online that the crime of opening a casino may become a high-risk crime in the cryptocurrency circle.

There are two main reasons. The founder of GXB was sentenced for opening a casino. It is also rumored that the crimes Shanxi has accused the exchange of recently are also related to the crime of opening a casino.

I don’t know whether the Shanxi incident is true or not. Let’s first look at the incident of the founder of Gongxinbao opening a casino.

According to the public information on the Judgment Documents Network, the facts of the case are briefly described. The main thing is that S Company developed a small program that contains multiple gambling games, which allows users to bet on gambling with virtual currency as chips. S Company then launched the small program on the APP mall developed by G Company, and G Company charged a handling fee of 1% of the recharged virtual currency amount. A total of 3 people were sentenced, A is a shareholder of S Company, B is the vice president of S Company, and C is the actual controller of G Company.

Note: The content comes from the Judgment Documents Network

What is the crime of opening a casino? The Criminal Law article states very simply: "Whoever opens a casino shall be sentenced to fixed-term imprisonment of not more than three years, criminal detention or control, and shall also be fined..." This is basically equivalent to saying nothing, perhaps because it was originally thought that these four words were easier to understand and the literal meaning was sufficient.

In the early years, the criminal law only had the "gambling crime", which covered three situations: gathering people to gamble, gambling as a profession, or opening a casino. Later, both theorists and practitioners believed that the harm of opening a casino was far greater than the other two situations, so the "opening a casino crime" was listed separately when the law was revised. In addition to the basic sentence, a new sentence was added, and in serious cases, the maximum sentence could be 10 years in prison.

However, there has been no clear definition of "opening a casino", resulting in unclear boundaries between "gambling crime" and "opening a casino crime" in practice, and constant disputes during convictions. Of course, this also leaves room for defense.

With the rise of the Internet, many casinos have also moved from offline to online. In order to combat online gambling, in 2010, a clear definition of online casinos was made, which basically revolved around "gambling websites and their surroundings." There are mainly four situations:

This year, the Ministry of Public Security's crackdown focuses on two areas: cross-border gambling and telecommunications network fraud.

Note: The picture is taken from the official website of the Ministry of Public Security

According to the latest judicial interpretation and judicial practice, the so-called "online casino" is no longer limited to gambling websites, but also covers applications and even WeChat groups. Related behaviors are not only establishment, development, and agency, but also purchase and rental.

Note: Content is taken from the Supreme Court official website

In addition, if you knowingly provide related services or assistance to gambling websites, gambling programs, etc., you may also constitute the crime of opening a casino. There are mainly three types of situations:

After briefly introducing the crime of opening a casino, let's talk about the criminal risks in the cryptocurrency circle. First, let's clarify the premise that the so-called risk excludes complete criminal acts such as malicious violations of the law.

There is a phenomenon that often occurs in the cryptocurrency circle. When a crime appears multiple times in a short period of time, people think it is a new type of pocket crime, which makes people a little panicked. In fact, it is not. There are almost no new crimes. They are all ready-made crimes, some of which have existed for many years. The high frequency of occurrence may be due to the crackdown and centralized rectification, or it may be because the industry has developed to a certain extent. The so-called pocket crime may not be necessarily, and it may also be a problem of the application of criminal law.

In practice, there is another situation that often occurs: the criminal acts of A and B are the same or similar, but in the end one is convicted of crime C and the other is convicted of crime D. The same act, different charges, may seem to be quite different, but in fact, they are all based on the same criminal law theory and logic. The process is a bit complicated, so I won't go into details. In short, simply studying a specific crime may not be very meaningful, especially if you don't have a solid professional foundation, it is easy to go astray.

I remember when I was in the procuratorate, my master said that criminal methods are endless, but the criminal law has not added too many new crimes. Why? Because criminal law emphasizes "penetration", that is, seeing the essence through the phenomenon, grasping the core key points, and no matter how fancy and complex the criminal methods are, they will not confuse the eyes. It's like the business of the currency circle is developing rapidly, but the underlying logic remains unchanged.

The so-called high-risk criminal risks in the cryptocurrency circle are not about opening a casino or a specific crime, but more about avoiding being involved in the form of an accomplice or downstream crime . How to understand this statement? Two meanings. First, common sense knows that it is a criminal act. If you knowingly commit a crime, it is only a matter of time before you are punished. Whether it is opening a casino, pyramid selling, or fundraising fraud, there is no need to understand the meaning of the crime too much, and it is useless to argue that you don’t know it is a crime. Second, for some well-known reasons, if the cryptocurrency circle provides peripheral services and assistance for certain criminal activities, it may also constitute a crime. This type of "accomplice" may constitute the same crime as the aforementioned criminal activities because it is a joint crime; or it may constitute another crime because it is a downstream crime.

Therefore, from the perspective of criminal compliance, instead of studying a large number of individual crimes, it is better to start from the characteristics of the cryptocurrency circle and actual business scenarios, analyze which types of business risks are too high and are more likely to become a link or means of illegal crimes, and then carry out pre-compliance prevention and isolate risks, which may be more effective. (Head image from europeanbusinessreview)

Reference: The founder of Gongxinbao, a high-risk cryptocurrency company, was found guilty of opening a casino and responded that he was implicated

(The author of this article, Huo Xiaolu, has 7 years of experience working in the procuratorate. He is currently a criminal lawyer and provides consulting services such as criminal laws to the cryptocurrency industry. If you need any consultation, please scan the QR code at the end of the article to contact us.)