Crypto World Law Enforcement Storm: From "Distant Ocean Fishing" to Policy Adjustment

In recent years, a law enforcement phenomenon known as "deep-sea fishing" has emerged in the field of virtual currency. This phenomenon originally stems from the legal community, particularly within the criminal defense circle. It refers to certain local judicial authorities enforcing the law across provinces, not purely for the purpose of combating crime and upholding the law, but rather with a nature more focused on generating revenue.

This phenomenon also exists in the virtual currency field, primarily manifested in criminal cases. From the perspective of criminal defense, many cases involving virtual currency face varying degrees of issues, whether in terms of procedures such as filing, jurisdiction, and handling of the property involved, or in terms of substantive aspects such as the composition of the crime and the definition of charges.

The implementation of strict regulatory policies on virtual currencies in the country has led some grassroots judicial organs to often directly associate virtual currencies with illegal activities. Coupled with the existence of some high-net-worth individuals in the virtual currency sector, the combination of these two factors has resulted in judicial authorities cracking down on the virtual currency field with the same intensity as traditional economic crimes.

However, since March of this year, it seems that this situation has seen a turning point. It has been reported that the Ministry of Public Security has issued a new regulation on handling inter-provincial cases involving corporate crimes, imposing stricter requirements on public security organs for handling such cases across provinces. This policy change has significantly cooled the "deep-sea fishing" phenomenon, and the virtual currency sector has also felt the "spring breeze" of this change.

As a criminal defense lawyer in the field of virtual currency, the charges we often encounter include organizing and leading pyramid schemes, operating illegal casinos, illegal business operations, assisting in information network criminal activities, and concealing or disguising criminal proceeds, among others. In addition, there are traditional charges such as fraud, theft, and computer-related crimes.

It is worth noting that most criminal offenses in the virtual currency sector can be classified as cyber crimes. According to current regulations, cyber crimes include traditional computer-related crimes, specific crimes related to the internet, as well as other offenses such as fraud, gambling, and infringement of citizens' personal information carried out through the internet.

In terms of jurisdiction for filing cases, the jurisdiction of cyber crimes is very broad. In addition to the public security organs at the place of the crime, the jurisdiction may also extend to the residence of the suspect, the location of the network server, the location of the network service provider, the location of the information network system that was attacked and its administrator, as well as the locations of the information network systems involved in the crime, the victim's location, and the location of property loss, among others.

This broad jurisdictional setup, combined with some grassroots judicial authorities' misconceptions about virtual currency transactions (which actually have no legal basis), leads to the situation where even if the police in one area do not file a case, it cannot be guaranteed that the police in other areas will not file a case. This is why cross-province law enforcement is relatively common in virtual currency cases.

Although the new regulations from the Ministry of Public Security mainly target interprovincial cases involving enterprises, many virtual currency cases actually do not involve formal businesses, but rather some informal operating entities. This means that even with the new regulations, the virtual currency sector still faces the risk of being "caught". Therefore, the phenomenon of "deep-sea fishing" in the virtual currency sector is unlikely to come to a complete end in the short term.

Since 2017, regulation in the virtual currency field has been ongoing. In the Web3 space, the controversy between "crypto world" and "chain circle" has never ceased. Even in open financial cities like Singapore, new policies targeting Web3 are being gradually implemented. These phenomena indicate that there is an irreconcilable contradiction between decentralized virtual currencies and centralized regulation.

Perhaps the ideal model is for regulators and virtual currency supporters to adapt to each other and find a balance, just like hedgehogs maintaining an appropriate distance, so that coexistence and development can be achieved.