Recently, a case involving using a VPN to speculate on cryptocurrency has drawn widespread attention in the crypto community. A user profited by using a VPN to buy low and sell high on an overseas exchange, but was deemed to have acted illegally by local public security authorities, and his profits in RMB were classified as illegal income and confiscated. Additionally, the user was fined 15,000 yuan, and even his phone and computer were confiscated as 'tools of the crime'. This incident has undoubtedly caused many participants in virtual currency trading to reflect deeply.
Case Review: Profits from Using a VPN for Cryptocurrency Speculation Classified as Illegal Income
The incident occurred in August of this year, when a public security authority in a certain area received a report about a user named Zhang San (a pseudonym) who used a VPN to access a well-known overseas trading platform and profited from virtual currency trading. After investigation, the public security authority determined that Zhang San's use of a VPN to bypass restrictions was illegal based on Article 14 of the Interim Regulations on the Administration of International Networking of Computer Information Networks, and thus deemed all profits obtained during the VPN usage for speculation as illegal income, which were confiscated.
Even more shocking is that similar cases have occurred in the past. Last year, a programmer was deemed to have violated the law for using a VPN to work, and over one million yuan he earned through work was confiscated. Although the nature of the work is different from cryptocurrency speculation, there are similarities in the background of 'bypassing restrictions to profit'.
The Controversy Over the Act of Speculating on Cryptocurrency via VPN
Although virtual currency trading is strictly regulated in the country, it has not been explicitly defined as illegal. So why are profits from bypassing restrictions to speculate on cryptocurrency considered illegal income? The core of the controversy lies in how to interpret Article 14 of the Interim Regulations on the Administration of International Networking of Computer Information Networks.
‘No one shall use the international network to engage in criminal activities that endanger national security or leak state secrets.’
Public security authorities believe that bypassing restrictions itself is an illegal act, and profits obtained through illegal acts are naturally considered illegal income. Therefore, when Zhang San used a VPN to speculate on cryptocurrency on an overseas platform, his profits were also regarded as illegal income.
Supporters believe that this interpretation helps regulate online behavior and virtual currency trading, but opponents question whether this interpretation is overly broad and whether there is a necessary connection between the act of bypassing restrictions and the legality of cryptocurrency speculation.
Legal Risks of Virtual Currency Transactions
Currently, while virtual currency trading is strictly limited in the country, it has not been explicitly defined as illegal. However, accessing overseas platforms via a VPN for virtual currency trading may trigger a series of legal issues.
The Illegality of Using VPNs to Bypass Restrictions
According to current regulations, using a VPN to bypass restrictions without permission is illegal. This act itself constitutes a violation, bringing legal risks to subsequent virtual currency transactions.
Profits Classified as Illegal Income
The logic of public security authorities is that since bypassing restrictions is illegal, profits obtained during the act of bypassing restrictions are naturally considered illegal income. This line of reasoning may trigger more similar cases, placing virtual currency traders at great risk.
Legal Ownership of Devices and Funds
In the aforementioned case, the bypasser's devices, such as phones and computers, were classified as 'tools of the crime' and confiscated, and all trading profits were seized. This is undoubtedly a significant warning for ordinary users.
Warnings and Insights
This incident has sounded the alarm for virtual currency investors. Although virtual currency trading itself is not illegal, if one uses a VPN to access overseas platforms, the act of bypassing restrictions may be deemed illegal, leading to the confiscation of profits and even more severe penalties.
For ordinary users, regardless of whether they engage in virtual currency trading, they should fully understand and comply with relevant laws and regulations to avoid falling into legal risks due to negligence or a sense of luck. At the same time, relevant departments may need to further clarify regulatory boundaries on such issues to reduce disputes and misunderstandings.
The legal risks of using a VPN to speculate on cryptocurrency are becoming apparent, and this real case serves as a vivid lesson in the rule of law for all investors and practitioners.