Comment: What criminal liability should be borne by those who illegally operate digital currency platforms?

If a blockchain digital currency platform is illegally operated, the parties involved may be guilty of illegally obtaining computer information system data.

Recently, after my team published an article titled "Civil Liability of Blockchain Digital Currency Platforms under Anti-Money Laundering Obligations" in the Securities Times, many readers called to ask whether operating a blockchain digital currency platform could constitute a criminal offense. To this end, my team will introduce typical cases to illustrate the criminal liability of illegal blockchain digital currency platforms.

Typical Cases

In April and May 2014, the defendant Wang planned to establish a bitcoin trading platform and recruited the defendants Xiao and Tan to jointly set up a " bitcoin " trading website (hereinafter referred to as the " website " ). Wang was the person in charge of the website, Xiao was responsible for technology and website maintenance, and Tan was responsible for financial management and the operation and promotion of the website.

Wang instructed Tan to use the identity information of people who had nothing to do with the website, and commissioned an agency to register a company named BTB ( HK ) LIMITED in Hong Kong , and fabricated information such as the company's shareholder structure, company investment background, and company registration address , with " Li Zhian " and " Wu Xiaohui " as executive directors. The website was officially launched on May 27 , 2014. The website extracted international Bitcoin market trading data for reference. Customers can buy and sell Bitcoin on the website by recharging RMB and Bitcoin, and the website charges transaction fees. After the website was launched, it launched a gambling model between the website and customers. In the first three months of operation under this model, most customers suffered losses, and the website made millions of yuan in profits. Afterwards, due to loopholes in the website's operating model, it could no longer make profits or even losses after mid- August 2014. Wang and others restricted customers from withdrawing cash and coins on the grounds of tight funds, and launched a gambling model between customers in September . At the same time, they launched activities such as equity subscription, recharge to get equity, and cash, and continued to deceive customers to recharge and trade.

During this period, Wang, Tan, Xiao and others frequently sold customers' bitcoins to cash in RMB; or, on the grounds that the handling fees of third-party payment companies were too high, they transferred the funds that customers recharged in third-party accounts to the personal accounts of " Wang Wu " and " Li Si " , and then transferred them to third-party payment companies such as Alipay and Tenpay or personal accounts registered by defendants Wang and Tan using other people's identity information to transfer and distribute the profit funds. After the incident, the public security organs seized RMB 34,441.57 from Wang, RMB 430,673.98 from Xiao , and RMB 806,478.34 from Tan .

After trial, the People's Court held that the original defendants Wang, Xiao, and Tan colluded to register a so-called Bitcoin trading operation company with false identity information, fabricated the company's shareholder structure, investment background, equity subscription, and recharge to get equity, etc., to deceive others' trust and conduct Bitcoin transactions and gambling on the website they opened. After cashing in the customers' Bitcoins, they fabricated the illusion that the website was hacked, closed the website and fled. The subjective intention to illegally possess other people's property was obvious, and they should be convicted of fraud in accordance with the law. The defendants Wang, Xiao, and Tan, in collusion with others, for the purpose of illegal possession, used fictitious facts and concealed the truth to defraud citizens of property, and the amount was extremely huge. Their actions have constituted the crime of fraud and are a joint crime.

Whether it constitutes fraud is still worth discussing

The author's team believes that it is questionable whether this transaction model constitutes the crime of fraud: First, the crime of fraud requires the victim to dispose of property voluntarily based on a mistake in understanding, and the victim loses property due to a mistake in understanding. In this case, the direct reason for the victim's loss of Bitcoin was that the Bitcoin trading platform appropriated the victim's Bitcoin, rather than the victim's voluntarily disposing of Bitcoin to the perpetrator. In fact, it is impossible for the victim to realize that the platform would appropriate his Bitcoin, so there is no mistake in understanding, so the perpetrator's behavior does not fully meet the criminal composition of the crime of fraud; secondly, whether virtual property such as Bitcoin is an object of protection for the crime of fraud in the criminal law is still in doubt (for details, please see the article " Legal Attributes and Criminal Law Protection of Bitcoin " published by the author's team on the hotline version of the Securities Times on April 30 , 2016 ).

However, this does not necessarily mean that the perpetrator's behavior is innocent. The author's team believes that the perpetrator's behavior may constitute the crime of illegally obtaining computer information system data. Article 285 of China's Criminal Law stipulates the crime of illegally obtaining computer information system data: " Violation of state regulations, intrusion into computer information systems other than those specified in the preceding paragraph (that is, computer systems other than computer information systems in the fields of national affairs, national defense construction, and cutting-edge science and technology - author's note) or use other technical means to obtain data stored, processed or transmitted in the computer information system, or illegal control of the computer information system, if the circumstances are serious, shall be sentenced to fixed-term imprisonment of not more than three years or criminal detention, and shall be fined or fined alone; if the circumstances are particularly serious, shall be sentenced to fixed-term imprisonment of not less than three years but not more than seven years and shall be fined. " It can be seen that in the case of " fraud " of virtual currencies such as Bitcoin, the crime of illegally obtaining computer information system data can be convicted and punished.