How to effectively defend your rights in virtual currency cases when you are defrauded by investing in virtual currency

1. Case background

Today, Shanghai Xinmin Evening News published an article on its official Baijiahao account - "Under the guise of investing in virtual currency, a man defrauded three "friends" of more than 1 million yuan and was arrested", introducing a case cracked by the police in Xuhui District, Shanghai.

Mr. Sun's friend Zhu has borrowed money from him many times in the name of investing in virtual currency since 2023, promising Mr. Sun high interest. When Mr. Sun lent or invested more than 400,000 yuan, he never got high interest. He felt cheated and asked Zhu to return the principal, but Zhu seemed to have procrastination cancer and found all kinds of reasons not to pay back the money, so Mr. Sun reported the case. After receiving the report, the Xuhui police in Shanghai found that Mr. Qian and Mr. Jin (their surnames showed that they were rich people) were also "in the same boat" as Mr. Sun - they were also defrauded of investment funds by Zhu in the same way, and the amount involved was as high as more than 1 million yuan. In the end, Zhu was criminally detained for fraud.

(The WeChat chat picture containing the lovely Lingna Belle is provided by Xuhui police)

II. Why do the public security accept different standards for virtual currency criminal cases?

In practice, Lawyer Liu or colleagues at Mankun Law Firm have received a large number of victims who were defrauded of virtual currency investment. Specifically, some were defrauded of RMB (in the name of investing in virtual currency projects), and some were defrauded of virtual currency (mainly USDT). We found a characteristic: if the direct loss of the party is RMB, as long as it meets the case filing standards, the police can basically file a case; if the direct loss of the party is virtual currency, even if it meets the case filing standards, many public security organs, especially grassroots public security organs, will not file a case, and even "educate the law" to the reporter - virtual currency investment and trading is illegal, and it is good enough that the public security organs do not crack down on you, why are you still thinking about filing a case?

(I) Which cases are easy to be accepted?

Through Liu's classification and sorting of a large number of victim cases, we have concluded that the following types of cases are likely to be accepted by the public security organs for criminal reports/accusations involving virtual currency:

1. The virtual currency involved in the case will eventually be fined and confiscated, such as organizing and leading pyramid schemes, opening casinos, gambling crimes, illegal business operations, etc. The virtual currency involved in these types of cases will eventually be nationalized after being converted into cash, so the judicial organs are quite enthusiastic;

2. Virtual currency cases with a large number of victims and a huge amount of money involved. Because such cases have great social harm, the judicial organs will also actively file cases for investigation and cracking based on considerations such as maintaining social order and recovering the losses of victims;

3. In cases involving virtual currency where there is sufficient evidence from the victims, the victims may, under the guidance of professionals such as lawyers, submit to the public security organs well-reasoned and logically rigorous reports and accusations, sufficient evidence materials, clear suspect identity information, etc., making it easier for the public security organs to solve the cases after accepting the cases, which can reduce a lot of case handling costs for investigators.

(II) Which cases are not easily accepted?

On the contrary, the following types of cases involving virtual currency are almost never accepted:

1. Cases involving theft or fraud of virtual currency with a small amount of money. Generally speaking, a theft case of 3,000 yuan can be filed nationwide, but cases involving theft or fraud of virtual currency, even if it exceeds 30,000 yuan or 300,000 yuan, may not be accepted by the public security;

2. Cases where the victim cannot prove that he originally legally held virtual currency are also difficult to be accepted. For the virtual currency lost by the victim to be protected by the judicial authorities, a basic prerequisite is to prove to the judicial authorities that the lost virtual currency belongs to him. If this cannot be done, it will be difficult to be accepted and filed even if the amount is large.

3. The suspects and the projects involved are not in mainland China. Even if the virtual currency projects are run by Chinese, most of them are now overseas. Once the projects and personnel suspected of crimes are not in mainland China, the cost of criminal prosecution for judicial organs will be greatly increased.

For other situations other than the positive and negative situations in (I) and (II) above, it is difficult for us to directly say which cases are easy to be accepted and which cases are not easy to be accepted. We can only say that according to the specific analysis of the specific circumstances of each case, the general direction is of course that the closer to the situation in (I), the easier it is to be accepted.

3. How to protect rights after suffering losses in virtual currency?

For ordinary virtual currency investors, since the country does not prohibit virtual currency investment, if they lose virtual currency during the investment process due to deception, theft, snatching, robbery, extortion, etc. by others, as long as they meet the standards for filing a case, they can of course choose to report to the public security, and the public security organs should also file a case. But before looking for the police to protect your rights, Lawyer Liu has the following small suggestions:

First, there must be evidence to prove that the virtual currency you lost is your legal property. For example, if it is obtained through purchase, exchange, gift, or even speculation, if the virtual currency obtained through illegal means is "intercepted" by others, although you can also report to the police, the person who reports the case will also face criminal legal risks;

Second, keep relevant text, voice, video, witness testimony and other evidence materials, such as chat records with the counterparty in virtual currency trading, audio and video recordings during offline transactions, etc.; if the virtual currency is stolen, find out if anyone has sent you a strange link, and you happen to click it.

Third, when communicating with the public security reception staff, rational persuasion is the main approach. Especially for grassroots staff, some people may say things that the victim cannot understand or accept, or show unfriendly attitudes, etc. due to their resistance to the unknown. At this time, as a victim, there is no need to be hysterical, but to try to communicate patiently many times. In this regard, our team of lawyers have personal experience that some grassroots police officers will take the initiative to study the relevant knowledge of virtual currency after multiple rational and peaceful communications with the reporter, and even ask their superiors for instructions, etc. If there is effective evidence to support it, there is still a great chance that the case will be accepted and filed.