introduction
With the rise of digital currencies, virtual currency transactions have become a global focus. In China, the regulatory attitude towards virtual currencies has always been very clear and strict. Recently, a local public security agency in China determined that a case of circumventing the firewall to speculate in virtual currencies was illegal and confiscated the profits from the speculation, which once again highlighted China's legal regulatory stance in the field of virtual currency transactions.
Case Review
In August this year, the public security organs of a certain place found a person named Liao who used an illegal channel to connect to the international network through VPN without authorization, and engaged in virtual currency transactions by buying virtual currency at a low price and selling it at a high price on an overseas trading platform. During his operation, Liao made an illegal profit of 90,000 yuan and provided the studio with eight mobile phones and eight computers as tools for committing crimes. The public security organs finally determined that his behavior violated Article 6 and Article 14 of the (Interim Provisions of the People's Republic of China on the Management of International Networking of Computer Information Networks) and Article 11, Paragraph 1 of the (Public Security Administration Punishment Law of the People's Republic of China).
Penalty Result
• Punishment measures: Order Liao to stop connecting to the Internet, give him a warning and fine him 15,000 yuan.
• Confiscation of proceeds: Confiscation of illegal proceeds of RMB 90,000.
• Confiscated tools: Tools used in committing crimes, including eight mobile phones and eight computers, were seized.
Legal Basis and Regulatory Policy
According to the Notice on Preventing Risks of Token Issuance and Financing issued by the People's Bank of China and seven other ministries in 2017 (hereinafter referred to as the "94 Notice"), virtual currency does not have monetary attributes such as legal compensation and compulsory nature, does not have the same legal status as currency, and cannot be circulated and used as currency in the market. In addition, according to the Notice on Preventing Risks of Bitcoin (Yinfa [2013] No. 289) (hereinafter referred to as "Document No. 289"), Bitcoin should be a specific virtual commodity, does not have the same legal status as currency, and cannot and should not be circulated and used as currency in the market.
Legal risks of virtual currency transactions
The Chinese government has clearly pointed out that virtual currency-related business activities are illegal financial activities and are strictly prohibited. Those who constitute a crime will be held criminally liable in accordance with the law. Any legal person, non-legal person organization or natural person who invests in virtual currency and related derivatives and violates public order and good morals will have their relevant civil acts invalid and will be responsible for the losses caused by them. Those suspected of disrupting financial order and endangering financial security will be investigated and dealt with by relevant departments in accordance with the law.
in conclusion
China's regulatory policy on virtual currency transactions is clear and consistent. Virtual currency does not have the same legal status as legal tender. Virtual currency-related business activities are illegal financial activities and are strictly prohibited and resolutely banned in accordance with the law. The illegal identification of circumvention of the wall and the confiscation of profits once again remind the public that there are extremely high legal risks in participating in virtual currency transactions and that the country's laws and regulations must be strictly observed. What do you think? Tell us what you think?