In April, a group of 20 OTC-traders sent a statement to the police of the city of Guangzhou, in which they accused the citizens of Yi Zhou and Xiang Li in a fraudulent scheme, under which they managed to get over 7,000 BTC ($ 56 million). At the moment, both detained by law enforcement agencies, reports Bjnews .
So, for two years, Zhou and Lee managed chat rooms in the WeChat messenger, in which OTC-traders used to place orders for buying and selling bitcoin and other cryptocurrencies. Since the introduction of the ban on ICO and spot-based crypto-currency trading, over-the-counter trading has become the only way to exchange digital assets for Fiat.
The defendants were trusted by traders, so they trusted when Zhou and Lee offered to participate in a scheme involving passive earnings on Bitcoin deposits. More than 100 traders handed them funds under management, being sure that they will go to arbitrage trading. Nevertheless, at some point delays in payments began and investors were suspicious.
3 / Context: The Beijing News reported that it includes 100+ users who were scammed of 7000+ BTC. You’re a scammer of the BTC to arbitrage between the exchanges and distribute profits back to users. However scammer disappeared after users' last large deposit
– cnLedger (@cnLedger) May 22, 2019
Guangzhou police have already opened a criminal case against the organizers of the scheme.
In a comment for Bjnews, a partner of the international law firm Dentons, Sa Xiao, said that individuals have the right to own and exchange bitcoins.
1 / "It is legal to own bitcoins in China" says Sa Xiao, Councilor of the Beijing Law Research Association, cited by The Beijing News. In addition, Xiao considers
Source (in CN): https://t.co/lQRaBECcIC– cnLedger (@cnLedger) May 22, 2019
4 / Xiao's views were based on the legal framework of rights. Occasional P2P bitcoin is in nature "disposition right", one of the rights of "ownership". Therefore owning & occasional P2P trading is legal
– cnLedger (@cnLedger) May 22, 2019
Xiao is also convinced that if a citizen coordinating a Bitcoin business loses user funds, he may incur criminal liability in accordance with existing legislation.
Recall last fall, the South China branch of the China International Economic and Trade Arbitration Commission in Shenzhen in the framework of the case of cryptocurrencies ruled that the laws of the PRC do not prohibit owning bitcoins.
Nevertheless, at the beginning of this month, WeChat threatened merchants involved in cryptocurrency trading by closing accounts. This policy is primarily aimed at limiting OTC trading in the messenger.
In China, ICO , airdrop-campaigns and even specialized events in some areas are prohibited. At the same time, the authorities attempted to close or restrict the activities of cryptocurrency exchanges.
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