ChainCatcher news, recently the Tianjin police disclosed a new type of scam involving "virtual currency investment and offline trading." The police found that the so-called "U coin" investment was just a facade, while the so-called "U merchants" were groups that helped the scammers transfer funds.Investigations revealed that since July this year, the criminal gang, under the guise of "U merchants," has committed more than 10 cases in Tianjin and surrounding provinces and cities, involving an amount of over 500,000 yuan. Currently, 4 members of the gang have been legally approved for arrest by the People's Procuratorate of Wuqing District, Tianjin.

ChainCatcher news, article from the official WeChat account of the Intermediate People's Court of Jinchang City. Recently, the Yongchang Court in Gansu, China, ruled on two cases involving telecom fraud, sentencing ten defendants to prison terms ranging from ten months to one year for the crime of assisting in information network criminal activities, and recovering illegal gains of over 1.19 million yuan.According to reports, since 2022, a certain Shen has illegally profited by raising funds to purchase computers, IoT cards, and other equipment, recruiting Li, Chen, and four others to join, and additionally recruiting more than ten people to successively rent houses in Hefei, Anhui, to establish a USDT (Tether) trading studio. They formed illegal over-the-counter trading groups through the Telegram app, buying low and selling high for profit. During this period, the five repeatedly took risks, knowingly helping telecom fraudsters settle payments between Tether and RMB at "high exchange rates," despite being aware that the U coins they received originated from online gambling and telecom fraud. Meanwhile, Shen also contacted downstream "coin traders" like Li to settle payments through methods designated by upstream criminals, using Alipay, WeChat transfers, and cash deposits. By the time the case was reported, the defendants had profited over 880,000 yuan, with more than ten victims, including residents like Meng from Chengguan Town in Yongchang County, losing over 5.9 million yuan while participating in virtual currency investments and online order brushing, with the funds all transferred to accounts related to Tether trading used by Shen and others.The court held that in this case, Shen and others used virtual currency trading activities to assist telecom network fraudsters in transferring funds, which has moved beyond mere virtual currency operations. Such behavior should be included as a key link in the comprehensive crackdown on telecom network fraud and illegal criminal activities, and the involved criminals should be punished.

ChainCatcher news, Executive Director Fu Rao of the Hong Kong International New Economy Research Institute wrote in the Ta Kung Pao article "Improving the Regulation of Virtual Assets for Healthy Industry Development," pointing out that the Supreme People's Court and the Supreme People's Procuratorate of China jointly issued an interpretation regarding several issues related to the application of laws in handling money laundering criminal cases, which explicitly lists virtual asset transactions as one of the methods of money laundering. This will have the following impacts on the virtual asset industry:Increased compliance costs for the industry. The introduction of regulations means that practitioners need to pay more attention to compliance issues and increase compliance investments to ensure that their businesses are legal and compliant. The market will undergo reshuffling, and some non-compliant U businesses and project parties may exit the market, further increasing industry concentration.Enhanced investor education. The introduction of regulations will prompt investors to pay more attention to the risks associated with virtual assets, improving their ability to identify risks.Gradual improvement of industry regulation. The release of this judicial interpretation will help regulatory authorities to conduct more effective oversight of the virtual asset industry, promoting healthy industry development.As Hong Kong vigorously develops its virtual asset economy, the mainland has responded by addressing serious crimes most easily triggered by virtual assets. In this context, both U businesses and ordinary investors should enhance their legal awareness, ensure compliance in transactions, and avoid falling into legal risks.