Key points of defense for OTC criminal cases

北京刘扬律师 · 2024-01-25T11:16:11.000Z

On September 24, 2021, ten departments including the central bank jointly issued the "Notice on Further Preventing and Dealing with the Risks of Speculation in Virtual Currency Transactions (hereinafter referred to as the "924 Notice"). Some of the views in this article will be elaborated in conjunction with the relevant spirit of the 924 Notice. Relatedly, at present, suspected crimes in the currency circle have attracted more and more attention from the case-handling agencies. As a link in the transaction of legal currency and digital currency, the currency circle OTC is more easily discovered in the entire criminal chain and is at the front end of the entire case. Due to the limited understanding of the currency industry by the case-handling agencies, OTC merchants often know nothing about the law. The resulting information gap and poor understanding have led to the number of OTC merchants who have been "accidentally injured". Therefore, in the defense of OTC suspected of committing a crime of trust in the currency circle, we must focus on the legality of the OTC behavior and whether the suspect has criminal intention to defend the innocence. At the same time, for those who do constitute a crime, the crime of trust based on the Considering that it is a misdemeanor, we should make a defense of misdemeanor based on the specific crime circumstances, social harm, etc., and strive for non-prosecution and the use of suspended sentences. At the same time, criminal reverse services such as property disposal and rights protection that are not involved in the case also run through the defense work. 1. Although the OTC behavior in the currency circle is an illegal financial activity, it is not equivalent to the criminal OTC behavior in the currency circle. It is customarily called "over-the-counter transaction" in the currency circle. Its essence is the exchange of legal currency and digital currency. In a nutshell In short, it means handing over money with one hand and coins with the other. Because of the customary term "over-the-counter transaction", it has led to many misunderstandings among the case-handling agencies. Many case-handling personnel do not understand the currency industry and relevant laws, regulations and departmental regulations. When they hear " The word "off-site" preconceptions that OTC's behavior is illegal and unfair, so it is necessary to clarify relevant legal and regulatory issues. First, normal personal OTC behavior can only be considered illegal financial activities at best. In previous relevant documents, they all made negative evaluations of the OTC behavior of institutions, and did not explicitly prohibit individuals from engaging in transactions in legal currency and virtual digital currencies. According to Notice 924, "Illegal financial activities such as the exchange business of legal currency and virtual currency... are strictly prohibited and will be resolutely banned in accordance with the law. Those who carry out relevant illegal financial activities that constitute a crime will be investigated for criminal liability in accordance with the law.""In the notice, no subject is added before the relevant statement. From a cautious point of view, it should be regarded as individuals engaging in OTC activities and are deemed to be illegal financial activities. However, at the same time, the notice also states "If a crime is constituted, criminal liability shall be pursued in accordance with the law." expression, that is to say, for normal and ordinary personal OTC behavior, at most, the general illegality should be evaluated. As a departmental regulation, the 924 Notice can only be used as a prerequisite for constituting a crime, but cannot be the basis for determining a crime. It also needs to be reviewed based on all subjective and objective elements. Second, individual OTC should not evaluate the nature of behavior based on "off-site" and "on-site". The so-called "on-site trading" refers to the transactions between individuals and the trading platform. Transactions, and "over-the-counter transactions" are transactions between individuals who are separated from the trading platform. What needs to be made clear is that there is currently no "on-exchange trading" in our country! Before the 94 announcement, individuals and trading platforms could Those who are engaged in legal currency transactions, such as buyers who want to purchase virtual digital currency, only need to pay the fiat digital currency to the platform, and the trading platform will pay the corresponding virtual digital currency to the buyer. This is on-site trading. The 94 Announcement completely banned it. This behavior does not prohibit legal currency transactions between individuals. Therefore, after the 94 announcement, trading platforms can no longer engage in legal currency transactions with individuals. Currently, trading platforms widely adopt a matching mechanism. For example, if a buyer wants to buy virtual digital currency, The platform will "introduce" all sellers who want to sell virtual digital currencies to buyers. Buyers will transfer legal currency to sellers offline through banks or WeChat or Alipay. After receiving the money, online sellers will contact the trading platform. Confirm. After confirmation, the trading platform will put the seller's virtual digital currency into the buyer's "wallet", and a legal currency transaction ends. In summary, from an offline perspective, the buyer gave the seller a legal currency. Online, the seller gives the buyer a virtual digital currency. The trading platform does not participate in the transaction during the entire process and does not charge any handling fees. In essence, the trading platform is not involved. Even if it is matched by the trading platform, other In essence, it is still an over-the-counter transaction, which is no different from "paying money with one hand and handing coins with another" between individuals. Therefore, when determining whether an individual's OTC behavior constitutes a crime, especially whether it constitutes "knowingly" subjectively ", should not be distinguished by "off-site" or "on-site", but should be comprehensively determined based on transaction price, transaction volume, KYC review, chat records and other related circumstances.Third, whether individuals engaging in legal currency transactions falls within the scope regulated by Notice 924 still requires further explanation from relevant departments. Previous documents stated that "virtual currency is a specific virtual commodity", and Notice 924 did not deny this. However, according to the requirements of Notice 924, individuals can neither engage in legal currency transactions nor currency transactions, so it has The most compliant way to do some virtual digital currencies is to hoard them. This obviously conflicts with the previous positioning of virtual digital currencies as specific virtual commodities. Therefore, if personal legal currency transactions are completely prohibited, does it violate higher standards? level of laws or administrative regulations? At the same time, the 924 notice mentioned "carrying out the exchange business between legal currency and virtual currency, and the exchange business between virtual currencies." Does general currency-to-crypto transactions and legal currency transactions between virtual digital currency enthusiasts count as engaging in a "business"? In particular, can currency transactions between players be considered a civil act of bartering? It also needs to be clarified through explanations from relevant departments or relevant judicial precedents. 2. The idea of defending innocence for currency OTC suspected of committing crimes. The "Criminal Law Amendment (9)" adds the crime of assisting information network criminal activities, that is, knowing that others use information networks to commit crimes, providing Internet access and server hosting for their crimes. , network storage, communication transmission and other technical support, or providing advertising promotion, payment and settlement and other assistance are independently criminalized. In the criminal law academic circle, the crime of helping and trusting is considered to be the principal offender of the accomplice. The author believes that in the practice of defense, the currency circle OTC is suspected of helping the crime, which mainly involves the helping behavior of "payment and settlement". The focus of the innocence defense for the crime of helping the letter mainly focuses on whether the criminal suspect is "knowingly", that is, whether the criminal suspect There is subjective intention to commit a crime. For the case-handling agencies, their preconception of guilt will lead to discrepancies between the confessions of some suspects and the actual situation, or they may be induced to make statements such as "I roughly know the source of the money." "Unjustified" is a confession in which the suspect thinks "nothing is wrong" but can actually be found to have subjective criminal intent. Therefore, the defender should combine the following specific circumstances to defend the suspect's lack of criminal intent.The first is whether individual OTC merchants have fulfilled sufficient KYC obligations. During the transaction process, individual OTC merchants should first clarify who the transaction object is. It is not enough to know who the transaction object is. It is also necessary to determine whether the transaction person and the bank card holder are consistent. In practice in the currency circle, video authentication is usually adopted, that is, the other party is required to hold their ID card and bank card to record a video. The content is usually "My name, ID card, and bank card belong to me, and the source of my funds is legal and legitimate." , and are willing to admit any legal liability." In this way, individual OTC merchants can determine the basic situation of the counterparty with which they are trading. It should be considered that individual OTC merchants have fulfilled their prudent KYC obligations. After all, individual OTC merchants are just ordinary individuals. Without the many inquiry systems of judicial authorities, it is impossible to further verify the counterparty. The defender believes that if an individual OTC merchant has fulfilled its KYC obligations and can provide relevant information about the other party during the investigation by the case handling agency, it should be determined that there is no subjective criminal intention. The second is whether the transaction price obviously deviates from the market conditions. Many case-handling agencies believe that the transaction prices of individual OTC merchants are often slightly higher than market prices during transactions, and therefore believe that individual OTC merchants have criminal intent. This also reflects that the case-handling agencies do not have a deep enough understanding of OTC in the currency circle. First of all, there are differences in the legal currency transaction prices of trading platforms. Taking the fiat currency transaction prices in the Huobi app as an example when the author wrote this article, the lowest price of USDT was RMB 6.58 and the highest price was RMB 6.61, with a difference of RMB 0.03. As the public security organs gradually deepen their crackdown on "two cards", the situation of frozen cards in fiat currency transactions in the currency circle is becoming more and more serious. Mainstream trading platforms such as Huobi app have launched so-called "blue shield merchants", that is, with high KYC certification, For merchants with good reputation, the price of such merchants will be more expensive, even 0.05 yuan more expensive than the price of normal platform users. Therefore, the defender believes that as long as the transaction price does not obviously violate the market conditions, the criminal suspect cannot be determined to have subjective intention because the transaction price is higher than the market price. The vast majority of individual OTC merchants are mainly engaged in the "inverted U" business, that is, they buy USDT in RMB at a price slightly lower than the trading platform, and then sell USDT at a price slightly higher than the trading platform. This process is It's called "inverted u", and what it actually earns is the difference of a few cents between buying and selling.The author once represented some OTCs in the currency circle who were suspected of committing crimes, covering up, and concealing criminal proceeds. The transaction price of some OTC merchants was a few cents or more higher than the market price. In this case, if the OTC merchant argued that he It is difficult for the court to accept this defense of ignorance of the illegality of the other party's source of funds. After all, a normal OTC merchant should know the market conditions, and a normal counterparty cannot "give away money" for no reason. Many investigators believe that since they can match purchases and sales on the trading platform, why do they still need to find off-site OTC merchants? They believe that OTC merchants have criminal intent. In fact, to a large extent, this is also a helpless move in the currency circle. The author is also involved. For digital currency transactions, the current legal currency transactions, especially the process of exchanging digital currencies for RMB, are extremely common in having their cards frozen. Some people have calculated that the card freezing rate is over 30%, which is a very exaggerated figure. Therefore, both parties to the transaction must ensure safety. , if your card is not easily frozen, you can only seek more familiar and reliable OTC merchants for transactions off-site. Even if the prices of these OTC merchants are slightly higher than those of the trading platform, you can only make this choice for safety. After all, if there are cheaper Among reliable merchants, who would choose the more expensive one? Therefore, if the transaction price does not seriously deviate from the market conditions, it cannot be determined that the individual OTC merchant has subjective criminal intent just because the transaction price deviates slightly from the market conditions. The third is whether the necessary review has been carried out on the other party's transfer bank card. Take the sale of USDT as an example. As an individual OTC merchant, in addition to the transaction price, what you are most concerned about is whether the source of the other party's money is legal and whether your card will be frozen due to transaction behavior. Therefore, the vast majority of individual OTC merchants are most afraid. is receiving black money. At present, the common trading habit in the industry is to require the other party to provide bank transaction records. If the transaction records are less than one month, the transaction will usually not be continued. Transaction flow alone is not enough. You also need the other party to use a bank card to transfer money to your WeChat account, and then use WeChat to withdraw funds to the bank card. This is used to prove that the card is a "live card" and at the same time, the other party's WeChat account must be recognized. Whether there is any abnormality in the signal, individual OTC merchants will dare to continue legal currency transactions only if all the above-mentioned transaction risks are eliminated.If the criminal suspect has performed all the above tasks, how can it be determined that he has the subjective intention to collect black money? How can it be considered that it subjectively provides payment and settlement for criminal acts? Fourth, the size of the transaction has no relationship with whether there is subjective mens rea. Many case investigators believe that the transaction amount of individual OTC merchants is too large and there is subjective criminal intent. The basic logic is that it is inconsistent with objective logic for individual OTC merchants to conduct such large transactions without asking the source of funds. In essence, the currency circle is a relatively closed circle. There are many players who hold huge amounts of virtual currency assets, and there are also many "Ten Thousand Coin Hous". You must know that the value of 10,000 Bitcoins is about 3 billion yuan. Buying a mining machine , paying electricity bills, paying wages to employees, etc., all require the conversion of a large amount of virtual digital currency into RMB. Large-value transactions are widespread in the currency circle OTC. Therefore, the size of the transaction amount cannot be used as one of the factors to determine that the criminal suspect has subjective criminal intent. one. 3. The defense idea of misdemeanor for those suspected of supporting trust crimes in currency circle OTC. Since the crime of supporting trust is a misdemeanor with a sentence of less than three years, in most cases, the misdemeanor defense is also a good choice. For example, the defender believes that the basic evidence proving that the suspect is suspected of committing a crime is relatively comprehensive based on the composition of the persons subject to compulsory measures, the items seized at the scene, and the collection of electronic evidence. In this case, blindly defending not guilty will lead to crime. The suspect was treated more seriously. In this case, when meeting the criminal suspect, the relevant laws and regulations should be explained clearly. In addition to the crime itself, the relevant content of the procedural law should be explained so that the criminal suspect can find the solution based on his actual situation. A better "way out". The vast majority of people in the currency circle have relatively weak legal awareness, and some criminal suspects behave in very extreme ways, blindly resisting the investigation, not making truthful confessions, missing the opportunity to be released on bail pending trial, and not approving arrest. In this case, they will often be sentenced to death later. punishment. For cases where there is indeed evidence to prove the suspected crime, the defender should prepare detailed interview transcripts during the interview that can prove the criminal suspect's attitude of admitting guilt and accepting punishment, so as to prevent the criminal suspect's subjective attitude from being well expressed in the transcripts of the case handling agency. In addition, it is necessary to determine the amount of illegal income with the criminal suspect and actively refund compensation. When the case is submitted for approval of arrest, the above materials are submitted together, which can often win the result of not approving the arrest "without the need for arrest".4. Disposal of non-involved property suspected of crimes in the currency circle OTC and other matters. On December 5, 2020, at the seminar on criminal issues in the field of Internet finance, the author introduced relevant cases about the currency circle and judged the case-handling agencies to crack down on crimes in the currency circle. The intensity of crime will become increasingly greater, as will the recovery and confiscation of digital currencies involved. On January 25, 2021, China’s Supreme People’s Procuratorate held a press conference on “Giving Full Use of Procuratorial Functions to Promote Cyberspace Governance”. Zheng Xinjian, director of the Fourth Procuratorate of the Supreme People's Procuratorate, said at the meeting that "the black and gray Internet products have formed an ecosystem and continued to provide blood and food for cyber crimes, which has become an important reason for the frequent occurrence of cyber crimes. The procuratorial organs are playing an important role in combating and controlling cyber crime." Regarding gray property, the first is to highlight the key points of punishment and cut off the chain of interests. The second is to strengthen the application of property penalties, increase the cost of crime, prevent criminals from benefiting from crime, and achieve "cutting off wealth and blood". The third is to combine the performance of prosecutorial duties , and promote comprehensive management." This focused on the issue of the application of property penalties. However, it is very easy for local case-handling agencies to seize, freeze, and confiscate the legal property of those involved in the case beyond reasonable limits. Prior to this, many criminal judgments in the currency circle also reflected that the criminal suspects and defenders’ arguments and defenses that some of the properties involved in the case were legal property failed to receive support from the court. For example, in the plustoken case that had a wide impact on the currency circle, (2020) Su 09 Criminal Ruling No. 488 shows that the Intermediate People’s Court of Yancheng City, Jiangsu Province held that: “There is an issue with the identification of Chen Bo’s legal property. After investigation, Chen Bo did not provide relevant clues that he legally owned more than 700 Bitcoins. Or materials, and the plustoken platform is recognized as a pyramid scheme activity platform. The digital currency invested in the platform is used for the capital operation of the pyramid scheme system and should be confiscated as property used in pyramid scheme crimes." In the currency circle-related cases represented by the author, an individual It is not uncommon for legal property to be excessively frozen and seized, which also puts forward newer and higher requirements for defenders, that is, how to protect the legitimate rights and interests of criminal suspects and how to prevent personal legal property from being inspected, detained, frozen or even eventually confiscated. This is also The new field of legal services in criminal cases is summarized as "criminal reverse business". The demand for this legal service is particularly important in the currency circle.The reason is that some case-handling agencies handle currency cases with colored glasses. They preconceptionally believe that as long as it is a currency-related case, there is no legal property. Even if the suspect can prove that it is legal property, he will still be punished with a penalty. . When handling relevant cases, the author will collect a large amount of evidence regarding the legal property of the criminal suspect to form a complete chain to prove that the relevant digital currency is the legal property of the individual. For example, some criminal suspects earned digital currency from trading. In this case, all transaction records on the exchange can be retrieved by sending an email to the exchange, and the transaction process can be systematically described in legal language and submitted. Case handling agency. Some criminal suspects obtain huge profits by investing in the primary market. This requires actively contacting the project side, issuing relevant supporting materials, and obtaining evidence such as chat records, investment contracts, and transfer records in and out of the chain to support it. . Some criminal suspects obtain digital currency by investing in mining machines for mining. They need to obtain mining machine purchase contracts, mining machine operation and maintenance contracts, mining machine maintenance records, electricity bill payment records, and digital currency output records, etc., supplemented by Relevant chat records and other content to prove the generation process of digital currency in legal assets. In practice, even if all the above evidence can be obtained and submitted to the case-handling agency, it will still be difficult to unblock it in time, and there is still a risk of being fined and confiscated. Therefore, it is also necessary to prove that the digital currency in the personal legal assets has no relationship with the suspected criminal offense. In other words, personal legal property has not been used to finance criminal activities. During the argumentation process, it needs to be analyzed based on specific crimes and different circumstances of individual cases. Due to limited space, I will not go into details here. 5. Conclusion It is relatively common for OTC in the currency circle to be suspected of helping people commit crimes. Since the crime itself is a misdemeanor, many suspects have given up looking for professional lawyers to defend themselves. Based on the characteristics of this type of crime, the author believes that the first step is to understand through interviews. Whether the criminal suspect has subjective criminal intent and objective criminal behavior, and based on this, accurately choose the direction of innocence defense and misdemeanor defense. We can neither blindly plead with misdemeanor to make a party who should not be found guilty of a crime have a lifelong criminal record, nor can we A blind defense of innocence closes the two doors to the parties involved in not approving the arrest and deciding not to prosecute.

On September 24, 2021, the central bank and ten other departments jointly issued the "Notice on Further Preventing and Dealing with the Risks of Virtual Currency Trading Speculation (hereinafter referred to as the "924 Notice")". Some of the views in this article will be elaborated in conjunction with the relevant spirit of the 924 Notice. Related At present, the suspected crimes in the currency circle have attracted more and more attention from the investigating authorities. As a link in the transaction of legal currency and digital currency, the currency circle OTC is more likely to be discovered in the entire criminal chain and is at the forefront of the entire case. Due to the limited understanding of the currency circle industry by the investigating authorities, OTC merchants often know nothing about the law. The resulting information gap and cognitive gap have led to a large number of OTC merchants being "accidentally injured". Therefore, in the defense of suspected crimes of aiding and abetting letters in the currency circle OTC, it is necessary to focus on the legality of the OTC behavior and whether the suspect has the subjective intent to commit a crime to defend innocence. At the same time, for those who do constitute a crime, based on the consideration that aiding and abetting crimes are minor crimes, they should be combined with specific criminal circumstances, social harm, etc. to defend the crime of minor crimes, and strive for non-prosecution and the use of suspended sentences. At the same time, criminal reverse business such as disposal of non-involved property and rights protection also runs through the defense work.
1. Although the behavior of OTC in the cryptocurrency circle is an illegal financial activity, it is not equivalent to a crime
The OTC behavior in the cryptocurrency circle is usually referred to as "over-the-counter transactions" in the circle. Its essence is the exchange of legal currency and digital currency. In a nutshell, it is the exchange of money with one hand and currency with the other. Because of the customary term "over-the-counter transactions", there are many misunderstandings among the law enforcement agencies. Many law enforcement officers do not understand the cryptocurrency industry and relevant laws, regulations and departmental rules. When they hear the word "over-the-counter", they have a preconceived idea that OTC behavior is illegal and improper. Therefore, it is necessary to clarify relevant legal and regulatory issues.
First, normal individual OTC behavior can only be considered as illegal financial activities at most. In previous relevant documents, negative evaluations were made on institutional OTC behavior, and individuals were not explicitly prohibited from engaging in transactions between legal tender and virtual digital currency. According to the 924 Notice, "illegal financial activities such as legal tender and virtual currency exchange business... are strictly prohibited and resolutely banned in accordance with the law. Those who engage in related illegal financial activities that constitute a crime shall be investigated for criminal responsibility in accordance with the law." In the notice, no subject was added before the relevant statement. From a cautious perspective, it should be regarded as an individual engaging in OTC behavior that is identified as an illegal financial activity, but at the same time, the notice also states that "if a crime is constituted, criminal responsibility shall be investigated in accordance with the law." In other words, normal and general individual OTC behavior should at most be evaluated on general illegality. As a departmental regulation, the 924 Notice can only serve as a prerequisite for constituting a crime, but cannot be the basis for determining a crime. It also needs to be examined based on all subjective and objective factors.
Second, individual OTC should not use "off-site" and "on-site" as the standard to evaluate the nature of behavior. The so-called "on-site transaction" is the transaction between individuals and trading platforms, while "off-site transaction" is the transaction between individuals separated from the trading platform. It should be made clear that there is no "on-site transaction" in my country at present! Before the 94 announcement, individuals and trading platforms could engage in legal currency transactions. For example, if a buyer wants to buy virtual digital currency, he only needs to pay the legal digital Huobi to the platform, and the trading platform will pay the corresponding virtual digital currency to the buyer. This is an on-site transaction. The 94 announcement completely prohibits this behavior, but does not prohibit legal currency transactions between individuals. Therefore, after the 94 announcement, trading platforms can no longer engage in legal currency transactions with individuals. At present, the trading platform widely adopts the matching mechanism. For example, if a buyer wants to buy virtual digital currency, the platform will "introduce" all sellers who want to sell virtual digital currency to the buyer. The buyer transfers the legal currency to the seller offline through a bank or WeChat or Alipay. After receiving the money, the online seller confirms with the trading platform. After confirmation, the trading platform will put the seller's virtual digital currency into the buyer's "wallet", and a legal currency transaction ends here. In summary, from an offline perspective, the buyer gives the seller a legal currency, and from an online perspective, the seller gives the buyer a virtual digital currency. During the entire process, the trading platform does not participate in the transaction and does not charge any handling fees. In essence, the trading platform is not involved. Even if it is matched by the trading platform, it is still an over-the-counter transaction in essence, which is no different from the "one hand over money, the other hand over currency" between individuals. Therefore, when determining whether an individual's OTC behavior constitutes a crime, especially when it constitutes "knowingly" subjectively, it should not be distinguished by "over-the-counter" or "on-site", but should be comprehensively determined based on the transaction price, transaction volume, KYC review, chat records and other relevant circumstances.
Third, whether individuals engaging in legal currency transactions fall within the scope of the 924 Notice still needs further explanation from relevant departments. Previous documents all stated that "virtual currency is a specific virtual commodity", and the 924 Notice did not deny this. However, according to the requirements of the 924 Notice, individuals cannot engage in legal currency transactions or currency-to-currency transactions. Therefore, the most compliant approach for existing virtual digital currencies is to hoard them, which is obviously inconsistent with the previous positioning of virtual digital currencies as specific virtual commodities. Therefore, does the complete prohibition of personal legal currency transactions violate higher-level laws or administrative regulations? At the same time, the 924 Notice mentioned "conducting legal currency and virtual currency exchange business, and exchange business between virtual currencies". Do currency-to-currency transactions and legal currency transactions between general virtual digital currency enthusiasts belong to engaging in a "business"? In particular, can currency-to-currency transactions between players be considered as civil acts of barter? It still needs to be explained by relevant departments or relevant judicial precedents.
2. The innocence defense strategy for the cryptocurrency OTC suspected of aiding and abetting crime
The Criminal Law Amendment (IX) adds the crime of assisting information network criminal activities, that is, knowing that others use information networks to commit crimes, providing Internet access, server hosting, network storage, communication transmission and other technical support for their crimes, or providing advertising promotion, payment settlement and other assistance, which is an independent crime. In the criminal law community, the crime of assisting is considered to be the principal crime of the accessory. The author believes that in the defense practice, the suspected crime of assisting in the crime of the coin circle OTC mainly involves the assistance of "payment settlement". The focus of the defense of innocence for the crime of assisting in the crime is mainly on whether it is "knowingly", that is, whether the criminal suspect has the subjective intention to commit the crime. For the case handling agency, its preconceived presumption of guilt will lead to the confession of some suspects being inconsistent with the actual situation, or the confession of the suspect who thinks "nothing" under the induced situation, such as "I roughly know that the source of these money is improper", which can actually be determined to have subjective intention to commit a crime. Therefore, the defense counsel should defend the suspect's lack of criminal intent in combination with the following specific circumstances.
First, whether individual OTC merchants have fulfilled their KYC obligations. In the process of trading, individual OTC merchants should first clarify who the trading object is. It is not enough to know who it is. It is also necessary to determine whether the trading personnel and the bank card holder are the same. In the practice of the currency circle, video authentication is usually adopted, that is, the other party is required to record a video holding an ID card and a bank card. The content is usually "My name, ID card, and bank card are all mine. My source of funds is legal and legitimate, and I am willing to admit any legal responsibility." In this way, individual OTC merchants can determine the basic situation of the other party to the transaction with themselves. It should be considered that individual OTC merchants have fulfilled their prudent KYC obligations. After all, individual OTC merchants are just ordinary individuals. They do not have many query systems of judicial organs and cannot further verify the counterparty. The defense believes that if individual OTC merchants have fulfilled their KYC obligations and can provide relevant information of the other party during the investigation by the case-handling agency, it should be determined that they do not have subjective criminal intent.
Second, whether the transaction price obviously violates the market conditions. Many investigating agencies believe that individual OTC merchants often have slightly higher transaction prices than the market conditions during transactions, and therefore believe that individual OTC merchants have criminal intent, which also reflects that the investigating agencies do not have a deep enough understanding of the currency circle OTC. First of all, there are differences in the legal currency transaction prices of trading platforms. Taking the legal currency transaction price in Huobi app as an example when the author wrote this article, the lowest price of USDT was RMB 6.58 and the highest price was RMB 6.61, with a difference of RMB 0.03. With the gradual deepening of the crackdown on "two cards" by public security organs, the situation of frozen cards for legal currency transactions in the currency circle has become more and more serious. Mainstream trading platforms such as Huobi app have launched the so-called "Blue Shield Merchants", that is, merchants with high KYC certification and good reputation. The prices of such merchants will also be more expensive, even RMB 0.05 more expensive than the prices of normal platform users. Therefore, the defense believes that as long as the transaction price does not obviously violate the market conditions, the criminal suspect cannot be determined to have subjective intent by the transaction price being higher than the market price. The vast majority of individual OTC merchants are mainly engaged in the "reverse U" business, that is, they buy USDT with RMB at a price slightly lower than the trading platform, and then sell USDT at a price slightly higher than the trading platform. This process is called "reverse U", and the actual profit is the difference of a few cents between the purchase and the sale. The author has represented some currency circle OTCs suspected of aiding and abetting crimes, covering up and concealing the proceeds of crime. The transaction price of some OTC merchants is a few cents higher than the market price or even more. In this case, if the OTC merchant argues that he does not know that the other party's source of funds is illegal, this defense is difficult to be accepted by the court. After all, a normal OTC merchant should know the market situation, and a normal transaction counterparty cannot "send money" for no reason.
Many investigators believe that since buying and selling can be matched on the trading platform, why do we need to find OTC merchants over the counter? They believe that OTC merchants have criminal intent. In fact, to a large extent, this is also a helpless move in the currency circle. The author has also participated in digital currency transactions. At present, the phenomenon of frozen cards in legal currency transactions, especially in the process of exchanging digital currencies for RMB, is very common. Some people have calculated that the freezing rate is over 30%, which is a very exaggerated number. Therefore, for the sake of safety, the two parties to the transaction will not be easily frozen. They can only seek more familiar and reliable OTC merchants to trade over the counter. Even if the prices of these OTC merchants are slightly higher than those of the trading platform, they can only make this choice for safety. After all, if there are cheap and reliable merchants, who will choose more expensive ones? Therefore, if the transaction price does not seriously violate the market conditions, it cannot be determined that the individual OTC merchant has subjective criminal intent because the transaction price has a slight deviation from the market conditions.
Third, whether the other party's transfer bank card has been subject to necessary review. Taking the sale of USDT as an example, as an individual OTC merchant, in addition to the transaction price, the most important thing to care about is whether the source of the other party's money is legal, and whether the transaction behavior will cause their own card to be frozen. Therefore, the vast majority of individual OTC merchants are most afraid of receiving black money. At present, the common trading practice in the industry is to require the other party to provide bank transaction flow. If the transaction flow is less than one month, the transaction will usually not continue. Only the transaction flow is not enough. The other party needs to use the bank card to transfer money to their own WeChat, and then use WeChat to withdraw money to the bank card to prove that this card is a "live card". At the same time, it is necessary to determine whether there is any abnormality in the other party's WeChat account. Only when the above-mentioned transaction risks are eliminated, individual OTC merchants dare to continue legal currency transactions. If the suspect has performed all the above-mentioned tasks, how can it be determined that he has the subjective intention to receive black money? How can it be considered that he subjectively has the behavior of providing payment settlement for criminal acts.
Fourth, the size of the transaction amount has nothing to do with whether there is subjective criminal intent. Many investigators believe that the transaction amount of individual OTC merchants is too large and there is subjective criminal intent. The basic logic is that individual OTC merchants conduct such large transactions without asking about the source of funds, which does not conform to objective logic. In fact, the currency circle is a relatively closed circle, and there are many players who hold huge virtual currency assets, and there are also many "million-coin marquises". You must know that the value of 10,000 bitcoins is about 3 billion yuan. Buying mining machines, paying electricity bills, and paying employees wages all require a large amount of virtual digital currency to be converted into RMB. Large transactions are widely present in the currency circle OTC, so the size of the transaction amount cannot be used as one of the factors to determine that the suspect has subjective criminal intent.
3. Defense ideas for the lighter crime of the cryptocurrency OTC suspected of aiding and abetting crime
Since aiding and abetting crimes is a minor crime with a sentence of less than three years, in most cases, a defense of a minor crime is also a good choice. For example, the defense counsel believes that the basic evidence proving the suspect's suspected crime is relatively comprehensive through the composition of the personnel subject to compulsory measures, the situation of items seized on the scene, and the collection of electronic evidence. In this case, blindly making a not guilty defense will lead to a more severe punishment of the suspect. In this case, when meeting with the suspect, the relevant laws and regulations should be explained clearly. In addition to the aiding and abetting crime itself, the relevant content of the procedural law should be explained, so that the suspect can find a better "way out" based on his actual situation. Most people in the currency circle have a weak legal awareness. Some suspects behave very extreme, blindly resist investigations, do not confess truthfully, and miss the opportunity to be released on bail and not approve arrest. In this case, they are often sentenced to actual imprisonment in the later stage. For cases where there is indeed evidence to prove suspected crimes, the defense attorney should make detailed record of the meeting during the meeting that can prove that the criminal suspect has an attitude of admitting guilt and accepting punishment, to prevent the investigating agency from failing to express the criminal suspect's subjective attitude well in the record. In addition, the defense attorney should determine the amount of illegal gains with the criminal suspect and actively return it. Submitting the above materials together when the case is reported for approval of arrest can often obtain a non-arrest result of "no need for arrest."
IV. Disposal of non-involved property suspected of crimes in the cryptocurrency OTC industry and other matters
On December 5, 2020, at a seminar on criminal issues in the field of Internet finance, the author introduced relevant cases about the currency circle and judged that the efforts of the case-handling agencies to crack down on criminal crimes in the currency circle will become stronger and stronger, and the efforts to recover and confiscate the digital currencies involved will also become stronger and stronger. On January 25, 2021, the Supreme People's Procuratorate of China held a press conference on "Giving Full Play to the Procuratorial Function to Promote Cyberspace Governance". Zheng Xinjian, director of the Fourth Procuratorate of the Supreme People's Procuratorate, said at the meeting that "the formation of an ecosystem for cyber black and gray industries has continuously "transfused blood and provided food" for cyber crimes, becoming an important reason for the high incidence of cyber crimes. In combating and governing cyber black and gray industries, the procuratorate first highlights the focus of punishment and cuts off the chain of interests. Second, it strengthens the application of property penalties, increases the cost of crime, prevents criminals from gaining benefits from crime, and achieves "cutting off the money and blood". Third, it combines the performance of procuratorial duties to promote comprehensive governance." Among them, the issue of the application of property penalties was highlighted. And "cutting off the money and blood" is very easy to be used as a sword by local case-handling agencies to detain, freeze, and confiscate the legal property of the persons involved in the case beyond reasonable limits. Prior to this, many criminal judgments in the cryptocurrency industry also showed that the criminal suspects and defense counsel’s defense that some of the property involved in the case was legal property did not receive support from the court. For example, in the Plustoken case, which has a wide impact in the cryptocurrency industry, the Criminal Ruling No. (2020) Su09 Criminal Final 488 shows that the Intermediate People’s Court of Yancheng City, Jiangsu Province, held: “The issue of Chen Bo’s legal property identification. Upon investigation, Chen Bo did not provide any relevant clues or materials that he legally owned more than 700 bitcoins. In addition, the Plustoken platform was identified as a pyramid scheme platform, and the digital currency invested in the platform was used for the capital operation of the pyramid scheme system, and should be confiscated as property used for pyramid scheme crimes.”
In the cases related to the cryptocurrency industry that I have represented, it is not uncommon for individuals’ legal property to be over-frozen and seized. This has also put forward newer and higher requirements for the defense lawyers, namely how to safeguard the legal rights and interests of criminal suspects, and how to prevent individuals’ legal property from being investigated, seized, frozen, or even confiscated. This is also a new area of ​​legal services for criminal cases, summarized as “criminal reverse business”. This legal service demand is particularly important in the cryptocurrency industry. The reason is that some law enforcement agencies handle cryptocurrency cases with tinted glasses, and they preconceived that as long as it is a cryptocurrency case, there is no legal property. Even if the suspect can prove that it is legal property, it is still “a fine and done”.
When handling relevant cases, I will collect a lot of evidence for the legal property of the suspects to form a complete chain to prove that the relevant digital currency is the legal property of individuals. For example, some suspects earn digital currency through transactions. In this case, they can retrieve all transaction records on the exchange by sending emails to the exchange, and systematically describe the transaction process in legal language and submit it to the case-handling agency. Some suspects make huge profits by investing in the primary market, which requires actively contacting the project party, issuing relevant supporting materials, and retrieving chat records, investment contracts, and transfer records on the chain to prove it. Other suspects obtain digital currency by investing in mining machines. They need to retrieve mining machine purchase contracts, mining machine operation and maintenance contracts, mining machine maintenance records, electricity bill payment records, and digital currency output records, etc., supplemented by relevant chat records and other content to prove the generation process of digital currency in legal assets.
In practice, even if all the above evidence can be obtained and submitted to the investigating authorities, it is still difficult to unblock it in time, and there is still a risk of being fined and confiscated. Therefore, it is also necessary to prove that the digital currency in the individual’s legal assets has no relationship with the suspected criminal offense, that is, the individual’s legal property has not been used to fund criminal activities. In the process of argumentation, it is also necessary to analyze it in combination with the specific charges and different circumstances of the case. Due to limited space, I will not go into details here.
5. Conclusion Cases of suspected aiding and abetting crimes in the cryptocurrency OTC are quite common. Since aiding and abetting crimes themselves are minor crimes, many criminal suspects have given up looking for professional lawyers to defend them. Based on the characteristics of such crimes, the author believes that we must first understand through interviews whether the criminal suspects have subjective criminal intent and objective criminal behavior, and on this basis accurately choose the direction of defense of innocence and defense of lesser crimes. We cannot blindly use defense of lesser crimes to make the parties who should not be convicted of crimes bear a lifetime criminal record, nor can we blindly use defense of innocence to close the two doors of not approving arrest and discretionary non-prosecution to the parties.

Key points of defense for OTC criminal cases

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