Recently, there are more and more cases related to USDT. This is related to the efforts of Chinese judicial authorities to crack down on telecommunications fraud in recent years. Many upstream funds involved in the case have "borrowed" encrypted assets on a large scale to launder themselves. Because USDT has the advantages of global transactions and anonymous transactions, and is pegged to the US dollar at a 1:1 ratio, it is indeed a secretive and easy-to-use settlement tool.
I recently saw a case related to USDT and would like to share it with you to help you avoid mistakes.
The case is as follows: Defendant Chen, Zou (not yet in court) and Huang (not yet in court) discussed using USDT as the transaction object and exchanging RMB at the price of USD. After the discussion, Chen purchased Tether from retail investors on the virtual currency trading platform on the Internet. Fearing that he would be robbed, he hired defendant Li as a bodyguard to escort the cash for transactions with retail investors.
In February 2022, at a highway intersection in Zhongshan City, Chen used his mobile phone to trade about 814,000 USDT with Huang, and exchanged a total of more than 5.1 million yuan at the exchange rate between RMB and USD on that day. On the way back from the rental car, Chen and Li were caught red-handed by police officers at the checkpoint, and the transaction funds were seized on the spot.
The court finally sentenced the two to the crime of illegal business operation, believing that the defendants' behavior of converting the value of foreign currency and RMB using virtual currency as a medium was a disguised form of foreign exchange trading, constituting the crime of illegal business operation.
I think USDT is not "foreign exchange" and the case is controversial. In China, illegal foreign exchange trading is indeed an illegal act and constitutes a crime, but the key is, is USDT "foreign exchange"?
Foreign exchange has a clear definition, which will not be elaborated here. At present, my country has not yet passed legislation to clarify the legal nature of crypto assets and various types of crypto assets. USDT, as a crypto asset, a virtual asset that is only benchmarked against the US dollar in value, cannot be interpreted as a kind of "foreign exchange", and the act of buying and selling USDT cannot be interpreted as "disguised buying and selling of foreign exchange".
If simple OTC behavior is defined as "illegal business operation", it may violate the "principle of legality of crime".
Based on the tool attributes of USDT itself, the court has a preconceived notion that USDT is a high-risk tool, and then categorically identifies behaviors related to it as behaviors that are highly socially harmful and punishable by criminal penalties. In fact, this preconceived position is inconsistent with objective facts.
There is nothing wrong with technology. Cryptocurrencies such as USDT are a double-edged sword. They can also boost economic development and promote scientific and technological progress. Not everyone holds and uses cryptocurrencies to commit illegal or criminal acts.
