If cryptocurrencies are used to settle the proceeds of fraud, anyone assisting with the cryptocurrency might also be committing a crime in China. That’s according to an article published today by China’s People’s Court newspaper.
The seriousness of the crime depends on timing and how much they knew. For example, if the crypto provider knew in advance of the intent to commit fraud, they become an accomplice. They don’t need to be in collusion, which would involve participating in planning the fraud. They just need advance knowledge.
In most cases, the crypto provider is involved after the fact. This means there are three potential criminal paths. If they just handle the proceeds of fraud without forming an intentional relationship with the fraudster, they could be guilty of covering up and concealing criminal proceeds.
In the other two scenarios, the crypto provider is aware something dodgy is happening.
If the crypto provider forms an intentional relationship with the fraudster and helps them use cryptocurrency to cash out a specific crime, they are considered an accomplice. So they become a fraudster. This particular type of fraud is “assisting information cybercrime activities.”
A third path is where the crypto provider doesn’t know about the specific fraud, but knows the money is connected with some kind of internet crime. In that case, they are not an accomplice or a fraudster, but are guilty of “assisting information network criminal activities.”
Given the legal topic and the language barrier, this is not legal advice.
Doubtless, the purpose of the government article is to communicate that you’re in big trouble if you help a fraudster to cash out in crypto, whether you knew they were dodgy or not.
Meanwhile, during the last year Hong Kong has started to loosen its grip on the cryptocurrency sector. Some have viewed this as an experiment for China. That remains to be seen.
