Author: Luo Tao (Chief Compliance Consultant global block chain compliance Union, Tahota (Beijing) Law Firm)
On the evening of February 17, FCoin founder Zhang Jian released the "FCoin Truth" announcement, and FCoin has since determined a thunderstorm.
- FCoin releases latest announcement: funding gap of approximately 90 million USDT
- FCoin thunders, Zhang Jian confesses that over 900 million yuan cannot be paid, and foreign exchanges have significant financial risks
- Graphic dismantling: Where did FCoin assets go? Is there a problem with the funding chain in 2018?
- The only platform currency that has been locked up-the "sandwich" exchange marginalization crisis
- FCoin's self-help campaign
- Fcoin makes Ethereum a full-scale miner's fee up to 1.5 ETH
Zhang Jian said in the announcement that he is facing the problem that the capital reserve cannot be redeemed by the user's withdrawal. It is expected that the size of the redemption will be between 700-13,000 BTC (valued at approximately 68.6 million to 127 million US dollars). The profit of the project compensates everyone's loss.
Once the announcement was issued, it caused a stir in the industry. FCoin's telegram group, community and WeChat community all burst into blossoms, full of retail investors seeking Zhang Jian's rights. All rights groups were sprung up, and the news of each trail was very loud. For example, Zhang Jian did not run away but acknowledged the creditor's rights, successfully converted a criminal case into a civil case and avoided criminal liability. Not to mention that this statement is not accurate. Even if the retail case is successfully filed, it is necessary to draw a question mark as to whether it is possible to return the stolen goods. Moreover, judging from the current disclosure of the incident, it is still a civil dispute, and whether the case can be filed depends on further evidence and investigation. However, no matter whether it is civil or criminal procedures, for FCoin users, defending rights will be a path full of difficulties and uncertainties.
If the FCoin incident is deemed to be a civil dispute , then users are likely to suffer the consequences. According to the "Notice on Preventing Bitcoin Risk" issued by the Central Bank of 2013, the nature of Bitcoin was identified as a virtual commodity, and on September 4, 2017, the People's Bank of China, the Central Internet Information Office, the Ministry of Industry and Information Technology, and the State Administration for Industry and Commerce The "Announcement on Preventing the Risk of Financing of Token Issuance" issued by the General Administration of China, the China Banking Regulatory Commission, the China Securities Regulatory Commission, the China Insurance Regulatory Commission and other departments also stated: "… The financing of token issuance refers to the financing entity's illegal sale and circulation of tokens. The raising of so-called 'virtual currencies' such as Bitcoin and Ethereum from investors is essentially an unlawful and illegal public financing … The tokens or 'virtual currencies' used in the financing of token issuance are not left to the monetary authorities Issuance does not have monetary attributes such as legal compensation and compulsory, does not have legal status equivalent to currency, and cannot and should not be used as currency in the market … As of the date of this announcement, various token issuance and financing activities Should be stopped immediately … As of the date of this announcement, any so-called token financing trading platform must not engage in legal currency and token, 'virtual currency' mutual In the exchange business, it is not allowed to buy or sell tokens or 'virtual currencies' as a central counterparty, nor to provide pricing, information intermediation, and other services for tokens or 'virtual currencies' … There are multiple risks in the financing and trading of token issuance, including Investors must bear the investment risks themselves , such as the risk of false assets, the risk of business failure, and the risk of investment speculation. We hope that investors will beware of being deceived … ".
In judicial practice, courts generally treat bitcoin as a "specific virtual commodity" as "illegal things and their transactions are not protected by law", such as:
- Xie Quanchu and Yu Guanghui disputed the return of the restored material [(2019) XIANG 04 Min Zhong 1979], the Intermediate People's Court of Hengyang City, Hunan Province considered that the "TB shares" issued by the "ST International" investment platform purchased by Xie Quanchu and Yu Guanghui through the Internet , Shall belong to the "Issuance of Announcements on Preventing the Financing Risks of Token Issuance" from unauthorised issuance or use of tokens or "virtual currencies", which will seriously disrupt the normal financial order of the country and is one of the targets of current rectification and cleanup. . Therefore, the "TB shares" transactions conducted through the online platform should not be protected by law , and the disputes arising are not within the scope of the people's court to accept civil lawsuits .
- Ma Xuejuan and Lu Fengqin's case concerning the return of the restored material [(2019) Liao 09 Minshen No. 77], the Intermediate People's Court of Fuxin City, Liaoning Province believes that the Dogecoin purchased by the applicant and the respondent through the Internet platform belongs to the The tokens or "virtual currencies" issued or used without reference in the Announcement on the Financing Risks of Token Issuance have not been approved and seriously disrupt the normal financial order of the country. Therefore, Dogecoin transactions are conducted through the online platform. It is not protected by law, so the disputes generated are not within the scope of the court's acceptance of civil lawsuits . The original ruling dismissed Ma Xuejuan's prosecution was not inappropriate.
- Case of Jinan Kaige Network Technology Co., Ltd. and Sun Chenghao's Sale and Purchase Contract Dispute [(2019) 万 01 民 终 10232], Hefei Intermediate People's Court of Anhui Province believes that according to The “Announcement on Preventing the Financing Risk of Token Issuance” issued by the General Administration of China, the China Banking Regulatory Commission, the Securities Regulatory Commission and the Insurance Regulatory Commission on September 4, 2017 stipulates that Bitcoin is not issued by the monetary authorities prescribed by China and has no legal or mandatory attributes. From the date of the announcement, it is not allowed to buy or sell tokens or "virtual currencies" as a central counterparty. Kaige Company claims that Sun Chenghao pays the payment of 138272 yuan. According to the evidence submitted by Kaige Company and the statements of the parties, combined with relevant legal provisions, its claim is not to be accepted. The main reason is that the evidence submitted by Kaige Company is not sufficient to prove the establishment of a sale between it Contract legal relationship, even if there is a sales contract relationship between Kaige and Sun Chenghao, because the subject matter of the two parties is bitcoin, the sales contract advocated by Kaige should be an invalid contract and not protected by law . Kaige claims claims for payment based on invalid contracts and does not support them.
So, if the criminal procedure is followed, can the rights defending individuals get the ideal compensation?
First, whether the FCoin incident constitutes a criminal case depends on many factors. For example, whether the main operating body behind FCoin is in the mainland or overseas; whether FCoin has conducted operations and publicity activities related to digital currency transactions in mainland China; whether similar MLM methods have been used in the business process; its platform currency FT and other online currencies Whether this is a securitization token. Whether Zhang Jian needs to bear criminal liability and debt compensation liability depends on whether he is the director or decision maker of the FCoin operating entity, and whether he has misappropriated or embezzled the assets of the overseas entity. If it is said that FCoin exists in the form of communities and teams from beginning to end, and there is no corporate entity, then whoever is ultimately responsible for the loss of funds will bear these debts.
Secondly, the current law does not explicitly list digital assets as the protected legal currency category. Police acceptance generally uses P2P thunderstorms or illegal fundraising as relevant references. This requires a huge on-chain forensics process. Even if a security company provides related services, this process involves various aspects such as exchanges and Internet police. A set of processes has come down. Digital assets for user rights protection may have disappeared. Even if the case is successfully filed, it will be difficult to recover the stolen money. Moreover, FCoin is registered overseas, and even if the Chinese police exercise protectionist jurisdiction, cross-border evidence collection will undoubtedly make it more difficult to detect cases.
In summary, for digital currency investors, the exchange should be selected with care and caution, and well-known exchanges with rigorous KYC and high credit ratings should be selected. The potential risks cannot be ignored for the sake of temporary gain. For exchanges, they should also re-examine their own regulatory compliance and security mechanisms.