Points of defense for OTC criminal cases

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 behavior of OTC in the currency circle is an illegal financial activity, it is not equivalent to a crime.

The OTC behavior in the currency circle is habitually called "over-the-counter transaction". Its essence is the exchange of legal currency and digital currency. In a word, it means handing over money with one hand and handing over currency with the other hand. Because "over-the-counter transaction" is This customary term 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", they preconceptions that OTC's behavior is illegal and unfair. legitimacy, so it is necessary to clarify relevant legal 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 the 924 notice, "Illegal financial activities such as legal currency and virtual currency exchange business... are strictly prohibited and 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, relevant statements No subject has been added before. From a cautious point of view, it should be considered that individuals engaging in OTC activities are considered illegal financial activities. However, at the same time, the notice also contains the statement "Those who constitute a crime will be investigated for criminal liability in accordance with the law." That is to say, for Normal and ordinary personal OTC behavior should at most be evaluated in terms of general illegality. 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 combined with all subjective and objective elements. review.

Second, individual OTCs should not evaluate the nature of behavior based on "off-site" and "on-site" criteria. The so-called "on-exchange transactions" refer to transactions between individuals and the trading platform, while "over-the-counter transactions" refer to transactions between individuals who are separated from the trading platform. What needs to be made clear is that currently there is no “on-market trading” in our country! Before the 94 Announcement, individuals and trading platforms could engage in legal currency transactions. For example, if a buyer wanted to purchase virtual digital currency, he only needed to pay the legal digital Huobi to the platform, and the trading platform would pay the corresponding virtual digital currency to the buyer. This is floor trading. The 94 Announcement comprehensively prohibited this behavior, but it did not prohibit fiat currency transactions between individuals. Therefore, after the 94 Announcement, trading platforms can no longer engage in fiat currency transactions with individuals. The current trading platform widely adopts 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 currency to the buyer, and the buyer will transfer the legal currency offline through the bank or WeChat or Alipay. Transfer the money to the seller. After receiving the money, the online seller will confirm with the trading platform. After confirmation, the trading platform will put the seller's virtual digital currency into the buyer's "wallet". This concludes a legal currency transaction. Summary For example, from an offline perspective, the buyer gives the seller a sum of legal currency. From an online perspective, the seller gives the buyer a sum of 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 nature. This is no different from "paying money with one hand and coins with the other" between individuals. Therefore, when determining whether an individual's OTC behavior constitutes a crime, especially whether it constitutes "knowingly" subjectively, it should not be distinguished by "off-site" or "on-site", but should be based on transaction price, transaction volume, KYC review, Comprehensive identification of chat records and other related situations.

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. Innocence defense ideas for currency circle OTC suspected of helping people commit crimes

"Amendment to the Criminal Law (9)" adds the crime of assisting information network criminal activities, that is, knowingly providing others with technical support such as Internet access, server hosting, network storage, communication transmission, etc. for committing crimes by knowingly using information networks to commit crimes, or providing advertising promotion Helping behaviors such as payment and settlement are independently criminalized. In the criminal law academic community, the crime of helping and trusting is considered to be the principal offender of an 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 partner is. It is not enough to know who the transaction partner 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 is a 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 ​​minor crime for OTC in the currency circle suspected of helping people commit crimes

Since the crime of helping others is a misdemeanor with a sentence of less than three years, in most cases, a 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 and other matters suspected of crimes in Currency OTC

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 case-handling agencies will increasingly crack down on criminal crimes in the currency circle. For the digital currencies involved in the case, The intensity of recovery and confiscation will also become stronger and stronger. 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 platform for pyramid schemes. 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 cryptocurrency-related cases represented by the author, it is not uncommon for personal legal property to be excessively frozen and seized. This 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 seized. Investigation, seizure, freezing and even final confiscation, this is also a new field of legal services in criminal cases 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 demonstration process, it needs to be analyzed based on the specific crimes and different circumstances of the 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 committing 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. It is neither possible to blindly defend a party who should not be found guilty of a crime and have a lifelong criminal record, let alone A blind defense of innocence closes the two doors to the parties involved in not approving the arrest and deciding not to prosecute.

标签：OTC FOR OTC