BTC rebounded strongly overnight and reached $60,000 again. Last night [“ 8.19 Jiaolian Insider: The exchange rate war has achieved initial victory, and it is natural to push up gold and BTC ”] reviewed the analysis of the exchange rate war a year ago and the judgment that the Sino-US game will inevitably push up gold and BTC. On August 31, 2023, the day when Jiaolian published the article, BTC closed at 26.9k and gold at $1940. As of today, August 20, 2024, BTC has reached 61k again, and gold has set a new historical high, breaking through the key integer mark of $2,500. BTC +127%, gold +29%.
Yesterday, on August 19, 2024, the teaching chain article said, "Macro liquidity is about to enter a re-expansion cycle." The data that everyone is looking at is mostly the M2 supply data of China, the United States, Europe, and Japan. It has now climbed to more than 80 trillion US dollars.
Jiaolian reflected on this data again and felt that there seemed to be some deep-seated problems that had not been discovered. Not to mention that the M2 calibers of different countries are actually not consistent, and that the global liquidity of the US dollar is far beyond what M2 can cover, and M3 has long been kept secret, the total amount of M2 that can be observed is actually worth careful consideration.
Jiaolian thought of a question: You said that the total amount increased, is it because the US dollar has increased, or has the US dollar depreciated? For example, if there were 100 RMB and 100 USD, and the USD:RMB exchange rate was 1:10, then the total amount converted into US dollars would be 110 USD. However, if the USD depreciates and the USD:RMB exchange rate is 1, then the total amount converted into US dollars will increase significantly to 200 USD, while the amount of RMB and USD remains unchanged.
* * *
Yesterday, on August 19, the Supreme People’s Court and the Supreme People’s Procuratorate jointly held a press conference and issued a judicial interpretation, the full name of which is “Interpretation on Several Issues Concerning the Application of Law in Handling Criminal Cases of Money Laundering” (Fa Shi [2024] No. 10) [1]. The Supreme People’s Procuratorate’s official website said that “the two high courts issued the latest judicial interpretation to clarify the criteria for identifying money laundering crimes” [2], while the Supreme People’s Court’s official website said that it was “Interpretation of Several Issues Concerning the Application of Law in Handling Criminal Cases of Money Laundering by the Supreme People’s Court and the Supreme People’s Procuratorate” [1].
However, since the content of Article 5, Paragraph (6) of the interpretation is "transferring and converting criminal proceeds and their benefits through "virtual asset" transactions and financial asset exchange methods" , various media and self-media have picked it up, emphasizing that the judicial interpretation clearly lists "virtual asset" transactions as a method of money laundering. This statement is not a big problem, but after it was spread, some friends who did not pass the reading comprehension test understood it as equating cryptocurrency speculation with money laundering.
In fact, the interpretation of other clauses of Article 5 actually lists other means that may be used to implement money laundering, such as:
"Transferring and converting criminal proceeds and their proceeds through pawning, leasing, buying and selling, investing, auctioning, purchasing financial products, etc."
"Transferring and converting criminal proceeds and their proceeds by mixing them with operating income from cash-intensive places such as shopping malls, restaurants, and entertainment venues"
"Transferring and converting criminal proceeds and their proceeds through fictitious transactions, fictitious debts and credits, false guarantees, false reporting of income, etc."
"Converting criminal proceeds and their proceeds through the purchase and sale of lottery tickets, prize coupons, stored-value cards, gold and other precious metals, etc."
"Converting criminal proceeds and their proceeds into gambling proceeds through gambling"
etc.
Cryptocurrency speculation is a means, and money laundering is the purpose. Cryptocurrency speculation can be used to launder money, but it does not mean that cryptocurrency speculation is necessarily money laundering. Money laundering is a crime, but it does not mean that cryptocurrency speculation is a crime.
Just like in criminal law, driving can be a means of killing someone, but driving is not equal to killing someone. Killing someone is a crime, but driving is not a crime.
* * *
Jiaolian remembered a similar incident. More than two years ago, on February 24, 2022, the Supreme People’s Court issued the “Decision of the Supreme People’s Court on Amending the Interpretation of the Supreme People’s Court on Several Issues Concerning the Specific Application of Laws in the Trial of Criminal Cases of Illegal Fundraising” (Fa Shi [2022] No. 5) [3].
In this revision of the judicial interpretation, the Supreme People's Court added the eighth paragraph to Article 2 of the original judicial interpretation on the methods of illegally absorbing public deposits , which includes "illegally absorbing funds through online lending, investment in shares, virtual currency transactions, etc."
This revision was also misunderstood by many people at the time as defining all virtual currency transactions as illegal fund-raising. In fact, similar to this judicial interpretation, virtual currency transactions are only included as a means of illegal fund-raising, which does not mean that all virtual currency transactions are equal to illegal fund-raising.
Of course, this revision mainly plugs a gap, that is, the so-called "coin issuance" (token issuance financing) that emerged in 2017-2018, that is, a project party uses token (digital token) technology to produce a large number of digital tokens, and sells them to a large number of retail investors at a certain "issuance price" agreed upon by humans, raising a large amount of BTC, ETH or USDT from a large number of retail investors. This kind of activity once had some fancy names, such as ICO or I/O.
Since illegal fundraising in the previous criminal law required that the funds raised be RMB or other legally recognized property, when these project parties raised virtual currencies such as BTC, ETH or USDT, they bypassed the legal provisions and exploited a loophole. This is the continental legal system The rigidity of the law must be strictly observed. In the maritime law system of the United States and Britain, the old law can be interpreted arbitrarily and applied to new things. This flexibility has always been touted as the unique advantage of the maritime law system.
As for why the continental legal system does not design flexible discretion? I am not a legal professional, so I cannot make any rash comments. However, judging from some cases of judges being assassinated in recent years, perhaps the mainland people are more inclined to put fairness above freedom, and are determined to pursue ultimate accountability even at the risk of their lives when they believe they have suffered injustice. They are completely different from the American people who will never blame the ruling government for the millions of deaths caused by the epidemic.
The judicial interpretation is a patch, and it does not need to be subject to the restriction of "laws not having retroactive effect". In other words, the judicial interpretation revised in 2022 can also be used to judge a project that issued a coin in 2017 to raise "hard currencies" such as BTC, ETH or USDT and then ran away with the coins.
Therefore, as soon as the judicial interpretation was revised in early 2022, the project parties that issued crypto that year scattered like birds and beasts, and made all the profits they should have made.
—
[1] https://www.court.gov.cn/fabu/xiangqing/440681.html
[2] https://www.spp.gov.cn/xwfbh/wsfbt/202408/t20240819_663652.shtml
[3] https://www.court.gov.cn/zixun/xiangqing/346901.html
