Lawyer: Is deep-sea fishing in the crypto coming to an end?

In the past two years, a term has been circulating in the legal community, especially in criminal defense circles: "deep-sea fishing", which roughly means that some judicial authorities conduct cross-provincial revenue-generating law enforcement, and handling cases is not primarily aimed at combating crime and upholding the law, but mainly for generating revenue.

A similar situation exists in the crypto world, especially with criminal cases being predominant. From a criminal defense perspective, we indeed find various issues in virtual currency-related criminal cases, whether in procedural aspects such as case filing, jurisdiction, and asset freezing, or in substantive aspects like crime composition and distinguishing between different offenses.

Based on China's strict regulatory policies on virtual currencies, some grassroots judicial authorities unconsciously associate virtual currencies with illegal activities. Additionally, because some people in the crypto world are "very wealthy", this "perfect" combination makes judicial authorities' crackdown on the crypto world no less severe than traditional economic crimes.

However, since March this year, we understand that China may be applying the brakes to "deep-sea fishing". An internal circulating document shows that the Ministry of Public Security specifically issued a "Regulation on Jurisdiction of Cross-Provincial Enterprise-Related Criminal Cases by Public Security Organs" in March, introducing stricter regulations for public security organs handling cross-provincial enterprise-related criminal cases.

Subsequently, "deep-sea fishing" has noticeably cooled down, and the crypto world can clearly feel this "spring breeze".

As crypto criminal defense lawyers, we frequently deal with charges such as: organizing and leading pyramid schemes, operating illegal gambling, illegal business operations, assisting network crime activities, concealing criminal proceeds. Additionally, there are traditional charges like fraud, theft, and computer-related crimes.

Simultaneously, crypto criminal offenses can essentially be covered by network crimes, with network crime jurisdiction being extremely broad. What constitutes network crime? According to current regulations, it includes the following types:

First, traditional computer-related crimes (computer network information endangerment cases);

Second, network-related crimes (assisting criminal activities, illegal use of information networks, failure to perform information network security management obligations, etc.);

Third, other criminal cases involving fraud, gambling, personal information violations implemented through networks.

For specific case filing jurisdiction, it primarily follows the public security bureau where the crime occurred, but can also include locations such as the suspect's residence, network service server, network service provider, information network system management location, locations used by suspects/victims during the crime process, victim's location, and location of financial losses.

Returning to the crypto world, we mentioned earlier that many grassroots judicial authorities unconsciously believe crypto trading is illegal (which actually lacks legal basis). Combined with the extensive jurisdiction in crypto criminal cases, even if Public Security in Location A does not file a case, it cannot guarantee Location B's Public Security won't (because crypto cases are network crimes with numerous jurisdictional connection points), so cross-provincial cases are normal.

According to the Public Security regulations, the current focus is on restricting cross-provincial enterprise-related cases. Many crypto cases involve "small workshops" that essentially lack an "enterprise" factor, which means even with the "Public Security Cross-Provincial Enterprise Criminal Case Jurisdiction Regulation" as a "royal sword", it cannot guarantee the crypto world is free from "fishing" risks.

Therefore, crypto deep-sea fishing is unlikely to end soon.

The crypto world's overseas movement, which began with the "9.4 Announcement" in 2017, has not completely ended. The conflict between "crypto circle" and "blockchain circle" in the web3 domain has never ceased. Singapore, as a financially open city, will also implement its new web3 policy on June 30 (mainly affecting the crypto world). Looking at this, the contradiction between regulation, control, and the inherently resistant virtual currency (and its derivative crypto world) and centralized regulators will always be irreconcilable. The best model can only be for centralized regulators and decentralized followers to learn from hedgehogs' coexistence, finding a safe and comfortable distance between them, thus enabling coexistence and development.