On June 10th, Babbitt learned from the community that a wealth management wallet with “holding interest” was suspected of running, and the investment of one billion yuan was vacated. This "running" wallet is called TokenStore.
The user enters the wallet into the wallet “holding the currency”. The platform uses the so-called “AlphaGo to move bricks and arbitrage”. The platform claims that it can make profits regardless of the ups and downs, and the monthly income is 40% to 80% or even doubled.
At present, the official website is no longer accessible, and the App wallet cannot perform operations such as transfer and transaction. More than 2,100 victims set foot on Weiquan Road. According to one victim, the loss in just one place in Shenzhen has exceeded 150 million yuan.
For details, see the Babbit report: "Exclusively, a certain currency circle is exploding, and more than 2,100 people are on the rights road."
According to Babbitt, some investors have already gone to Shenzhen Longgang Police Station to defend their rights, including BTC, LTC, ETH, EOS, XRP, and USDT.
The PeckShield digital asset escort security personnel locked the target assets (EOS) flow to discover that up to now, there have been 25,803 EOS inflows to the stock exchange, and 1,581 EOS flows into the ZB exchange, totaling RMB 1.2 million. PeckShield is assisting the relevant exchanges to block the levy and continuously monitor and track the remaining levies.
How is the volume "coin" running in the law defined? What should defenders do? Will the Chinese Public Security Commission file a case? Is the overseas exchange obligated to assist the Chinese public security department? In response to these concerns of investors, Babbitt interviewed Xiao Yan, a director of the Bank of China Law Research Association, and Deng Jianpeng, a professor at the Central University of Finance and Economics Law School, to answer them.
Babbitt: This case involves the "coin" of the volume running, how to determine the legality?
Xiao Wei: According to the People's Bank of China, the Ministry of Industry and Information Technology, the China Banking Regulatory Commission, etc., "Notice on the Prevention of Bitcoin Risk", Article 1: Bitcoin has no centralized issuers, the total amount is limited, and the use is not affected. Four main features such as restrictions and anonymity. Although Bitcoin is called “currency”, it is not a currency of monetary status because it is not issued by the monetary authority. In terms of nature, Bitcoin should be a specific virtual commodity, does not have the legal status equivalent to currency, and cannot and should not be used as currency in the market. According to this, various currencies such as Bitcoin belong to "virtual goods" .
Babbitt: The currency involved in rights protection, in addition to the bitcoin that has been characterized as virtual goods, there are ETH, EOS, stable currency USDT, etc., can they be classified into virtual goods?
Deng Jianpeng: I think that these mainstream virtual currencies, they can exchange between the exchanges outside the country and the legal currency, in fact, they have formed part of the virtual property of the network. Judicial institutions or public security agencies, if they deny their nature as virtual property, do not help to protect the legitimate rights and interests of investors, so they are academically justified, according to the 2013 Central Bank’s Notice on the Prevention of Bitcoin Risk and the General Principles of Civil Law. Defining them as virtual property that should be protected by law is no problem.
Babbitt: How to defend rights? What should defenders do?
Deng Jianpeng: Two ways. First, consumers should collect evidence of capital investment, such as screenshots of bank statements, or other authoritative certificates, confirming how much virtual currency or legal currency funds they actually invested in the institution. Second, according to the authoritative website statistics, the price of these virtual currency at the time of the incident, the corresponding amount of RMB, and then look for the location of the case, the location of the investor, the public security agency where the suspect is located to report and file the case.
Babbitt: How will the public security department handle it? What law is it based on?
Xiao Wei: According to media reports, the token store may be suspected of fund-raising fraud , and according to Article 49 of the Supreme People's Procuratorate and the Ministry of Public Security on the Provisions for the Prosecution of Criminal Cases under the Jurisdiction of Public Security Organs (II) Provisions: For the purpose of illegal possession, illegal use of fraudulent methods to raise funds, suspected of one of the following circumstances, should be filed for prosecution : (1) personal fund-raising fraud, the amount is more than 100,000 yuan; (2) unit fund-raising fraud, the amount is More than 500,000 yuan. It can be seen that the suspected amount of the platform has already exceeded the legally prescribed lower limit.
Babbitt: Can the data platform track the blockchain address, can it be accepted by the public security?
Xiao Wei: In June 2018, the Hangzhou Internet Court adopted electronic evidence for the application of blockchain technology for the first time. In September 2018, the Supreme People's Court issued the "Regulations on Several Issues in Internet Court Trial Cases", which stipulated electronic Evidence for evidence, evidence, and cross-examination rules. Article 11 stipulates that the electronic data submitted by the parties can be authenticated by electronic signature, trusted time stamp, hash value check, blockchain and other evidence collection, fixed and tamper-proof technical means or through electronic forensic evidence platform. To prove its authenticity, the Internet court should confirm it. Therefore, the use of blockchain for tracking, its proof of compliance with the standards set by law, then it is likely to be accepted by the case handling agency .
Babbitt: Can the police let the exchange handle this “running money”? Can it be enforced?
Xiao Wei: Personally think that it is not feasible . The exchange essentially provides a fairly safe platform for various token transactions, but there are also security loopholes and legal risks. So far, exchanges have been stolen. These "running funds" are all kinds of virtual currency. If the public security organ files a case, it is considered to be a property involved. The public security organ must manage the property involved in the case in strict accordance with the law. No unit or individual may embezzle, misappropriate, privately divide, exchange, intercept, sit on, damage or arbitrarily handle the property involved. However, since the virtual currency is not ordinary money, the public security organ may entrust the exchange to take care of it, but it should not be disposed of at will.
Deng Jianpeng: The public security organ can make the exchanges cooperate with the handling of the running funds if there is evidence to prove that the relevant institutions are involved in running funds, and if the major shareholders and actual controllers of the exchange are in China . Babbitt: You said that the police need to issue a letter to the exchange, but the exchanges are all overseas, and all the obligations of the transaction are matched?
Deng Jianpeng: Strictly speaking, as an overseas independent legal entity, does the exchange necessarily accept the legal letter from the Chinese public security organs? This is of course a problem. Unless the country in which the other party is located has a judicial cooperation agreement with China, it does not have to accept the relevant requirements of the Chinese public security organ.
However, in view of the fact that the major shareholders or actual controllers of some well-known exchanges are Chinese, if the public security agency issues a judicial assistance letter, the other party will generally implement it. Including the well-known exchanges I have researched, it also mentioned that if consumers request a freeze, these exchanges will require consumers to provide documents from the Chinese public security authorities. Babbitt: If these coins are frozen on the exchange, who will deal with them? How to return?
Deng Jianpeng: If these coins are frozen on the exchange and there is evidence to prove that the coins are involved, then the exchange should follow the instructions of the public security agency and eventually return it to the investor who suffered the loss. If the exchange does not follow the instructions of the public security organ, Dealing with, the exchange must bear the corresponding legal responsibilities.
Babbitt: If these coins cannot be recovered, what should I do next?
Xiao Wei: There are multiple risks in the financing and trading of tokens, including the risk of false assets, the risk of business failure, and the risk of investment speculation. If these coins can't be recovered, it depends on the funds of the platform. If there is money, it can be used as compensation to minimize the loss of investors. If there is nothing, then investors may only be at their own risk.
Deng Jianpeng: If these coins cannot be recovered, or have already been sold, there is basically no better way. Unless there is assistance from relevant agencies, continue to track the flow of these coins, find the export of funds, and then find a frozen plan. Babbitt: Will the media and self-media that promote the wealth management products be subject to legal blame?
Deng Jianpeng: Of course , in October 2016, the Internet Finance Remediation Office has issued relevant regulations. For advertisements that publish financial products and services, the media or self-media should review their contents. If it is false propaganda, the media must bear joint and several liability. Even suspected of constituting a crime. If it is negligence or negligence, if the advertisement is published, the responsibility of the media is slightly lower. Therefore, it is possible to pursue responsibility.
Babbitt: What is the reference meaning of this rights defense incident?
Xiao Wei: Personally, the biggest meaning is to give investors a lesson. In the face of high-yield, low-risk, and even risk-free advertising slogans, be vigilant, vigilant, and vigilant. Don’t believe it easily, follow the trend blindly. If you don't understand anything, you will invest indiscriminately and beware of being deceived. Even if you want to try it, you can't put all your money into it. Even if you are heavily in debt, you must leave yourself behind. It is not a joke to understand that the sky will not fall off the pie. Don't ruin your life because of the word "greed"!