In September 2020, Xu, who made his first pot of gold by speculating in cryptocurrencies, met Huang, Yang, and Chen, who were also active in the "cryptocurrency circle". Huang was proficient in blockchain technology, Yang was a programmer, and Chen was proficient in English.

The four people hit it off and decided to develop the "Second Earth" platform and issue their own virtual currency SET. In order to improve the promotion efficiency, the four people adopted a promotional model: platform members recharged SET coins with Tether (a virtual currency pegged to the US dollar, 1 Tether is approximately equal to 1 US dollar) and used SET coins to purchase charging cabins of different levels, and then they could obtain corresponding benefits by developing downlines.

Before long, the project not only quickly became popular in the domestic "currency circle", but also opened up overseas markets relying on Chen's excellent English. In just two years, more than 70,000 people participated, reaching 1,302 levels, and the amount involved exceeded 100 million yuan. In November 2022, Mr. Wang, a cryptocurrency enthusiast, was recommended to participate in the "Second Earth" project. After finding that he could not withdraw cash, he called the police. In May 2023, the public security organs transferred the case to the court for review and prosecution.

To accurately characterize cyber crime, we must first understand the technical principles. To this end, a case handling team was formed to systematically learn blockchain knowledge, communicate with professional institutions on technical issues many times, and clarify concepts such as "decentralization", "public chain" and "mining". On this basis, through a series of evidence, it was confirmed that SET coin is a virtual currency with no value and no physical project support that cannot be circulated on the "public chain". In the name of promoting SET coin, Xu and others required platform users to purchase charging cabins to obtain membership qualifications, and obtained income by developing downlines, which is suspected of pyramid selling crimes.

After solving the qualitative problem of the case, we can solve the quantitative problem. The defense counsel put forward the defense opinion that "Tether is a virtual currency, not a legal tender, and does not have legal compensation (referring to the legal ability of a currency recognized by law to pay debts within a specific range), and the value of Tether cannot be used to determine the amount of pyramid selling involved in the platform."

We conducted our own supplementary investigation. On the one hand, we used the blockchain browser developed by a professional technology company to query and retrieve the transaction records of the suspect's electronic wallet. We found out that Xu transferred more than 420,000 Tether coins from the platform to his personal wallet before the incident, and accurately identified his illegal gains. On the other hand, by combing through thousands of pages of bank statements, we found out that Huang used the illegal gains to invest and earn hundreds of thousands of yuan, and transferred 7.66 million yuan to his family.

In order to recover the stolen money in a timely manner, it was decided to hire a professional company to liquidate the temporarily seized virtual currencies such as Tether and Ethereum, while ensuring the safety of funds and transactions, and obtained RMB 28.84 million. At the same time, through legal explanation and reasoning, the defendants' families were guided to return more than RMB 5 million in stolen money, and all four defendants voluntarily pleaded guilty and accepted punishment. So far, the prosecution has recovered RMB 40 million in stolen money, which has been turned over to the state treasury after the judgment came into effect.

In September 2023, Xu and four others were prosecuted for organizing and leading the spread of the virus. In December of the same year, the court sentenced Xu and four others to fixed-term imprisonment ranging from six years to five years and six months for organizing and leading the spread of the virus, and each was fined.

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