Waves are rising again: when digital collections become "outerwear"

 Author: Xiao Sa team; Source: Xiao Sa lawyer

Recently, the digital collection industry has been in a state of upheaval. However, unlike a digital collection platform that was previously caught in a storm of public opinion, the subject involved in this incident is more like a fraud platform under the guise of investing in "digital collections". The former is at least within the scope of the digital collection industry, but there may be many irregularities in the platform's internal and operational aspects, while the latter is using the name of "digital collections" to tarnish the reputation of the already quiet digital collection industry. In today's article, the Sister Sa team will briefly introduce this "digital collection" fundraising fraud case uncovered by the Shanghai police.

01"Digital Collection" Investment - New Tricks of Criminal Gangs

As we all know, the so-called digital collection refers to the unique digital certificate generated by blockchain technology for specific works and artworks. Compared with previous digital artworks, the biggest difference is that the blockchain technology is used to generate a unique code, which distinguishes the digital artwork from other similar digital artworks, and thus has a higher value for collection and appreciation.

However, the so-called "digital collection" on the platform A involved in the case does not have such a code, nor does it use blockchain technology. In essence, it is just a promotional video of some ordinary paintings. According to reports, these paintings were purchased by criminals from teachers or classmates of the Academy of Fine Arts at a price of about 200-300 yuan. The value and cost are extremely low, but after being carefully packaged by criminals, they were uploaded and turned into "digital collections" worth thousands or even tens of thousands of yuan online.

So, how do these "digital collections" that are "fake at first glance" and "cheap at first glance" win the favor of so many users?

All of this is inseparable from the word "investment".

Although the "digital collections" themselves are fake, the "playing method" of the platform is very "sincere". Like the regular digital collection platform, there are many "digital collections" on sale on Platform A for everyone to buy, but the platform also promises that every "digital collection" purchased by users will have a fixed increase of 3%, and each transaction needs to pay 2.4% of it as a handling fee, and the remaining 0.6% is the user's investment income. In other words, assuming that A buys a digital collection worth 10,000 yuan on the same day, then he can definitely sell it at a price of 10,300 yuan the next day. After deducting the handling fee, the actual amount received is 10,060 yuan, and the net profit is 60 yuan. In addition, the platform also requires that users must immediately buy a painting of the same price after selling a digital collection, forcing users to continuously invest money in buying and selling. Users can also choose to cash in the paintings, but they only receive the aforementioned cheap paintings.

In addition, in order to further stimulate users to consume and bid for paintings, criminals not only registered their own accounts to create the illusion that digital collections are hotly traded, but also launched various vouchers to induce users to buy vouchers to enjoy more rights and interests. As a result, the criminals eventually made a profit of 17 million yuan with the help of handling fees.

02 Fixed Income Investment - A Typical Fund-raising Fraud

Illegal fund-raising is a crime that all readers must be familiar with. According to the provisions of the "Interpretation of the Supreme People's Court on Several Issues Concerning the Specific Application of Laws in the Trial of Criminal Cases of Illegal Fund-raising", to determine whether a certain behavior constitutes the crime of illegally absorbing public deposits or the crime of fund-raising fraud, the first thing to examine is whether the behavior meets the four elements of "non-public and unfavorable".

In this case, Platform A actually absorbed user funds in the name of buying and selling digital collections, which is a "absorbing funds in the form of legal operation", meeting the requirement of illegality; according to public information on the Internet, Platform A also publicly promoted it to the public through WeChat public accounts, WeChat groups, etc., meeting the requirement of publicity; the digital collections on Platform A are set to have a fixed return of 3% (the actual return is 0.6%), meeting the requirement of inducement; Platform A does not set access requirements for users, any user can log in to trade, and the publicity is to the public, thus meeting the requirement of non-specificity. Therefore, the behavior of Platform A is a typical illegal absorption of public deposits.

It is worth considering whether this behavior further constitutes the crime of fund-raising fraud. In fact, users who participate in the sale do not care about the authenticity of the "digital collections", and may even know that their actual value is only a few hundred yuan. They just want to make a profit from it and believe that they can "grasp the opportunity and withdraw in time", so there seems to be no objective fact of being deceived. Since there is no deception, there is no question of the crime of fund-raising fraud.

However, Sister Sa's team believes that this case still belongs to the typical case of fund-raising fraud. The reason for this is that users are not deceived by the authenticity of the digital collection itself, but by the criminals who make users believe that they can profit from it. However, in fact, users cannot actually obtain the amount of assets recorded on their own platform-this is the "fraud" of this case. At the same time, this fact is sufficient to prove that the criminals do not want to deliver the amount of assets to users at all, and the purpose of illegal possession is obvious.

Therefore, the operator of platform A is likely to be suspected of committing the crime of fund-raising fraud.

03 Beware of "investment" - the red line that users and practitioners should be vigilant about

Through the above analysis, it is not difficult to see that this is indeed a fund-raising fraud under the banner of "investment". Its model is exactly the same as the first domestic NFT criminal case introduced by the official account of Sister Sa's team (attached link https://mp.weixin.qq.com/s/Swwr9W0QGDgvlhTRfIZElA), but the latter is a sophisticated pyramid scheme. The common point between the two is that they both use the slogans of "investment" and "income" to attract many users to participate actively, thereby defrauding users' funds.

This tells users that whether it is on a digital collection platform or other Web3 projects, if the platform promotes in the name of "investment", "making money", "high returns", etc., then they should carefully confirm the way and channel of obtaining income as well as the caliber and method of its promotion. Once it is found that its behavior meets the requirements of "non-public disadvantages" or the requirements of pyramid selling, or there may be "fraud", then they should stop losses in time and stay away from the "minefield".

On the other hand, for many practitioners who are still committed to entrepreneurship, committed to working in the digital collection industry and even the Web3 industry, when promoting and designing projects, they should be vigilant about "investment" and similar words, properly design the gameplay, and never let the project become a tool for criminals.

04 Written at the end

The emerging track needs everyone's maintenance, and the rise of the industry requires everyone's joint efforts. In such a rapidly changing era, only by keeping the red line can entrepreneurs be down-to-earth and users can have a pillar.