Lawyer's point of view | Plus Token's illegal analysis and criminal identification

Recently, the Plus Token case continued to ferment, causing widespread concern. Plus Token, the full name of the Plus Token digital currency, is a global blockchain ecological application. It is a multi-currency cross-chain wallet, decentralized trading platform, global payment, and intelligent arbitrage. An ecosystem that combines the power of mining and the blockchain industry chain. This paper briefly introduces the process and operation mode of the current Plus Token case fermentation, and discusses and analyzes the illegality and criminal identification of Plus Token.

First, the Plus Token case fermentation process

According to relevant media reports, Plus Token is a decentralized digital asset wallet and a decentralized trading platform that supports multi-currency storage such as Bitcoin, Ethereum, Litecoin, Dogecoin, Bitcoin. Digital currency such as Ripple. The team was formed by former employees of Samsung and Google. In April 2018, the test began to release Plus Token. In September 2018, the “Plus Token Global Launch Ceremony” was held at the Blue Ding Hotel in Jeju Island, Jeju Island, South Korea. As of March 15, 2019, the platform has more than 1 million members and the membership fee is more than 1.3 billion yuan .

On June 27, 2019, the Plus Token wallet was run and could not be withdrawn. On the same day, Vanuatu law enforcement agencies arrested a number of suspected criminal Chinese, including the use of the Plus Token network platform for pyramid scheme criminal suspects. On July 6, 2019, the Vanuatu police handed the suspect to the Yancheng police, but according to the Odaily Planet Daily, the return was only an important trader of the Plus Token fund, not the principal, the boss behind the scenes had not been arrested, suspected to abscond, the police It is going all out to hunt down .

At this point, the Plus Token case is still fermenting. According to the "Regulations on the recent Plus Token case" publicly replied by the Yancheng Public Security Bureau on July 12, public security agencies in Hunan, Beijing, Jiangsu and other places have launched investigations into the Plus Token case.

Second, Plus Token mode of operation

According to a white paper published by Plus Token , "Plus" is a master currency developed by the Plus Token technical team. It is a decentralized encrypted distributed digital currency and can be regarded as a certificate of Plus Token . At the same time, the use of "Plus" can be used for transactions, transfers, promotion of user commission settlement, and exchange of currency with Bitcoin, Ethereum, Litecoin, Dogecoin and other virtual currencies. Plus Token's operating modes are mainly the following:
Mode one
Users can recharge 3,500 yuan (500 US dollars) of Plus coins through the PsEx exchange or transfer the equivalent digital assets to the Plus Token wallet to obtain a "smart dog" . Arbitrage can be achieved by activating the "smart dog" and opening the "move brick" function. And every day, "smart dog" can get a static return of 0.5% to 2% through "moving bricks" , and up to 60% of the monthly income. For example, put the bitcoin with a total price of 10,000 yuan or the virtual currency such as Ethereum into the Plus Token wallet, and use the "smart dog" to select the intelligent "moving brick" arbitrage, which will get a high return of 6,000 yuan a month.
Mode two
Users join the "smart dog" promotion program to develop offline, gain dynamic revenue and "smart dog" rewards . And directly develop a downline, you can get 100% of the income of the first layer of "moving bricks", directly develop 10 downline, and get 10% of the income of the second generation to the 10th generation "moving bricks". At the same time, enjoy 50% of the transaction fee for the development of the offline line (the user will not do the cash withdrawal within 28 days, the platform will charge 5% fee; after 28 days, the 1% fee will be charged). In addition, the "smart dog" promotion plan There are also four levels of big households, big coffee, great gods and creation. Users can become extra large, big coffee, gods or creation members through the development of offline, and get extra rebates , among which large-scale members get 5% rebate. Large-cafe members get 10% rebate, Great God members get 15% rebate, and found-level members get extra monthly bonus and end-of-year dividend.

Third, the "Plus" currency illegal analysis and criminal identification

According to the announcement of the central bank on the prevention of financing risks of token issuance, the issuance of financing by tokens means that the financing entity raises the sale and circulation of tokens through tokens, and raises so-called “virtual currency” such as bitcoin and Ethereum to investors. In essence, It is an unauthorised illegal public financing, suspected of illegally selling tokens, illegally issuing securities, and illegal fund-raising activities such as illegal fund-raising, financial fraud, and pyramid schemes . Accordingly, the financing of issuing tokens in China is illegally raising funds, swindling public funds, and pyramid schemes . Any organization or individual may not illegally issue token financing activities, and may not engage in legal currency and tokens, or “virtual currency”. The exchange business between the two may not provide pricing, information intermediary and other services for tokens or "virtual currency". In order to obtain the legitimacy of the “Plus” currency, the Plus Token team referred to the “Plus” issued in the white paper it published as “pass” and differentiated both by literal translation and enumeration and token. s difference. At the same time, it is also believed that the pass-through economy is the digital economy of the next generation Internet. But in this white paper, the Plus Token team still defines "Plus" as the parent currency they developed. Thus, the "Plus" coin is still a kind of token .

According to Article 7 of the Regulations on Prohibition of MLM, “the following acts are classified as pyramid schemes: (1) Organizers or operators, through development personnel, require the development personnel to develop other personnel to join, and the development personnel directly or indirectly develop The number of personnel is calculated on the basis of compensation and payment (including material rewards and other economic benefits, the same below), to obtain illegal benefits; (2) organizers or operators through development personnel, require the development personnel to pay fees or to subscribe for goods, etc. In disguised payment of fees, obtain the qualification to join or develop other personnel to join, and obtain illegal benefits; (3) Organizers or operators through development personnel, require the development personnel to develop other personnel to join, form a relationship between the upper and lower lines, and the sales of the following lines Performance is based on calculation and payment of online rewards , and illegal interests are taken." Plus Token's operation mode meets the requirements of paragraph 2 , users need to recharge the 3,500 yuan of Plus coins or transfer the equivalent digital assets into the Plus Token wallet. In order to open the "smart brick" arbitrage function of "smart dog", That qualify for the Plus Token; Plus Token mode of operation of two subject to section 1, paragraph 3, Plus Token development of offline user, obtained directly or indirectly with its rolling development of the number of personnel and offline sales Based on the "transparation of bricks" income, handling fee dividends and rebates. Therefore, Plus Token is a typical MLM event .

In terms of criminal identification, one of the 224th articles of the Criminal Law stipulates: “ Organization and leadership in the name of marketing activities such as selling goods and providing services, requiring participants to obtain participation by paying fees or purchasing goods and services. Qualifications, and in a certain order to form a hierarchy, directly or indirectly based on the number of development personnel as a basis for remuneration or rebate, to induce and coerce participants to continue to develop others to participate, to defraud property, to disrupt the economic and social order of pyramid schemes , for a period of five years or less Incarceration or criminal detention, and fines; if the circumstances are serious, the sentence is imprisonment for more than five years, and fines." According to this, the founder of Plus Token and other relevant personnel have violated the organization and led the pyramid scheme .

With the popularity of blockchains and cryptocurrencies, blockchains and cryptographic currency slogans, in fact, projects for MLM activities are not just Plus Token. Recently, the People’s Court of Zhifu District of Yantai City publicly tried to organize and lead the pyramid scheme , and the five defendants, including Wang Mogang, issued a virtual digital currency “alliance ticket”, organized and led the pyramid scheme to absorb funds of 280 million yuan. Judgments and judgments are punishable by fixed-term imprisonment ranging from three to seven years, and penalties ranging from 100,000 to one million. At the same time, the money involved in the case is confiscated and turned over to the state treasury.

In the face of the current wide variety of investment projects, investors should make rational judgments, correct district blockchain projects and pyramid schemes to prevent blind investment damage .

Author: Chen Yunfeng