Introduction: The risks of currency-related cases are becoming increasingly apparent during the "relief phase."
When handling currency-related cases, you will repeatedly encounter a very typical emotion from the parties involved:
"I know I've been scammed, and the money has indeed been transferred out. I can see it on the blockchain, so why is no one taking responsibility and why can't I get it back?"
The problem often lies not in the facts, but in the procedures.
The clearer the facts are, the more likely the parties involved are to mistakenly believe that "remedies can be initiated"; however, in currency-related cases, whether remedies can be initiated depends on three things: the nature of the crime, jurisdiction, and whether the evidence can be put into practice.
The nature of currency-related disputes has also changed in recent years:
Early cases were mostly about "crypto theft and running away"; now, the structures appear more legitimate (crypto listing services, U-merchant exchanges, NFT investment platforms), but asset paths are more complex, entities are more dispersed, and cross-border transactions are more common. Therefore, when cases progress to the "relief stage," they often encounter three major obstacles:
- Assets have value, but their nature and the nature of transactions are not easily determined quickly: are they property, contractual assets, investment rights, or "tools" in a suspected criminal chain?
- Cross-border and multi-entity structures make jurisdiction and evidence collection a real challenge: the blockchain is here, the exchange is there, the server is overseas, and the person has disappeared?
- Civil and criminal matters are mutually constrained : once a party is deemed "potentially involved in criminal matters," civil matters can easily be blocked or even transferred to other jurisdictions, and the pace of relief is completely out of the control of the parties involved.
The following three typical cases will clarify "why the problem is blocked" and "what a lawyer can do".
Real Case Review
Case 1: Cross-border "Listing Service Fee" Scam
A company from country H planned to list its token on an exchange in country S and contacted a Chinese sales representative at the exchange. They agreed to pay 800,000 USDT as a listing service fee.
After the payment was completed, the salesperson became unreachable. The exchange stated that the salesperson had resigned and the service fee had not been received.
Key obstacles in the progress of the case
- The case involves obvious cross-border factors, making it difficult to initiate civil remedies directly; in terms of procedural choice, the principle of criminal priority requires that the issue of whether to file a case be resolved first.
- The cross-border nature of crypto assets presents real difficulties for evidence collection and jurisdiction, such as wallet transaction records being distributed across different blockchains and exchange servers being located overseas.
- There is disagreement on the nature of the behavior: whether it constitutes criminal fraud or breach of civil contract directly determines which procedure the case will proceed to and whether relief can be initiated.
What can a lawyer do?
The first step is not to rush to write about "how you were scammed". First, draw out "how the money went": the transfer path, wallet address, timeline, the other party's identity information, communication records, and exchange feedback.
Prepare two sets of scripts simultaneously:
For criminal cases: Emphasize the key points of territorial/personal jurisdiction and stress the crucial facts of "intent to illegally possess" (inducement, fabrication of identity/authority, service promises, refusal to fulfill obligations, loss of contact, etc.).
For civil cases: Compress the dispute into "service fee payment - service non-performance - unfounded possession by the other party", to provide a material basis for subsequent negotiations/property preservation.
Don't treat the "exchange's response" as a conclusion, but as an entry point for evidence: It's common for exchanges to deny their commitments, but lawyers should turn it into a source of clues about the other party's internal management, authority, and business relationships.
Case 2: USDT Exchange Scam
An investor met an "investment advisor" online and was recommended to exchange USDT through a U-trader. The investor transferred over three million yuan to multiple accounts, but the funds never arrived. The U-trader was subsequently arrested, but because it only provided exchange services and had no direct connection to the upstream fraud ring, the police ultimately terminated the investigation.
Key obstacles in the progress of the case
First, conduct a "traceability assessment," then discuss the path forward. This assessment is brutal, but essential: Which accounts can still be frozen? Which entities can be located? What evidence can be used to close the loop?
Break down the "fund flow" into two lines and run them simultaneously:
- On the bank's side: the transfer chain, the identity of the receiving account, and the destination of funds (whether they are concentrated or dispersed in a short period of time).
- On-chain side: Does it exist that are nodes related to aggregation, collection, cross-chain, or exchange entry for known wallets?
The core variable in these types of cases is often not "whether a lawsuit can be filed/initiated," but rather "whether asset control can be achieved at key junctures." We will explain the feasibility and risks of each juncture to our clients throughout the process, ensuring that decisions are based on feasibility.
Case 3: NFT Investment Scam
A customer purchased a series of high-value NFTs through an online platform, which claimed that these NFTs would generate future art dividends and rare digital rights. After the customer paid a total of approximately 5 million RMB , the platform suddenly shut down, the website became inaccessible, and the person in charge disappeared. Subsequent investigations revealed that the NFT smart contract code contained a backdoor, allowing the assets to be transferred at will.
Key obstacles in the progress of the case
- As a derivative right of digital assets, NFTs possess both investment and trading attributes, and their legal characterization remains highly uncertain under existing rules.
- The platform's entities and smart contracts are highly anonymous, and their cross-border deployment presents real obstacles to asset tracking, entity identification, and jurisdiction.
- Even though technical tracking is possible through contract logs, on-chain records, or IP information, cross-chain assets often involve multiple jurisdictions, making actual recovery extremely difficult.
Expanding practical perspectives
Translating the technical facts into language that the judiciary can understand: a backdoor in a contract means that control is not in the hands of the customer; "can be transferred at will" corresponds to the important factual support of "illegal possession".
Don't just focus on on-chain evidence: bank statements, recharge records, platform promotional promises, profit-sharing mechanisms, chat logs, contract terms, and backend screenshots are often more persuasive to law enforcement agencies than "on-chain analysis reports".
It's also important to explain the probability of recovery in advance: the combination of contract backdoors, cross-chain technology, and anonymity essentially maximizes the difficulty of asset recovery. Even criminal charges may not be able to "save" the assets, but at least it can help control key nodes.
The core reason for the obstruction of civil remedies
Looking back at the three cases mentioned above, it can be seen that although the types of cases are different, they all encountered highly similar institutional obstacles in the civil path after entering the relief stage.
1. The principle of criminal priority
- For acts involving criminal offenses, an investigation must be initiated first, and civil litigation usually has to wait for the completion of the criminal proceedings.
- Once a criminal judgment addresses property rights, a subsequent civil lawsuit will trigger the principle of "res judicata".
- If a civil case is transferred to the public security bureau and the court determines that the conduct constitutes a crime, the civil proceedings will be forced to be interrupted.
2. Difficulty in cross-border accountability
- With the funds and suspects involved in the case spread across multiple countries, cross-border evidence collection, investigation, and enforcement are highly restricted.
- Anonymity and programmability allow assets to be split and transferred in a short period of time, further reducing the possibility of recovery.
3. The identification of assets and the characterization of behaviors are complex.
- Crypto assets can be payment tools or they can represent investments or derivative rights; these qualitative differences directly affect the path to redress.
- Even if civil proceedings are initiated, courts often find it difficult to support requests for restitution due to dispersed assets, insufficient evidence, or unclear application of the law.
Practical Implications
The limitation of civil remedies is not only a procedural issue, but also a systemic constraint.
In currency-related cases, the criminal route remains the most realistic and feasible remedy, and the core role of lawyers is to help clients plan their path rationally and avoid exhausting their only remedy in procedural choices.
Lessons for lawyers: Don't just "pile up materials," focus on "path control."
Based on the issues exposed at different stages of the aforementioned three cases, the core competencies of lawyers in currency-related cases can be summarized into three levels: front-end risk identification, evidence and structural control during the process, and a clear understanding of the boundaries of the system.
(i) Front-end: Identify risks in advance, rather than remediate them afterward.
- Legality assessment of transactions : Analyze whether there are risks of illegal fundraising, fraud or illegal business operations, with a focus on whether the token has security characteristics.
- Asset attributes distinction : Payment or utility tokens are more likely to be included in the "tradable property" framework; tokens with guaranteed returns are more likely to trigger criminal intervention.
- Cross-border structure prediction : Whether it involves overseas entities, exchanges, or wallet addresses directly determines the difficulty of subsequent accountability.
(II) Process: Constructing a chain of evidence that is judicially acceptable
- Standardization of contracts and transaction records : Clearly define the purpose of transactions and rights and obligations, and save on-chain transaction records and operation logs.
- Preservation of evidence of cross-border communication : bank statements, platform emails, chat logs, etc., with attention to the time of their creation and their continuity.
(III) Understanding Institutional Boundaries: Path Selection Itself is a Strategy
- Most currency-related cases cannot bypass criminal procedures, and the feasibility of criminal pathways should be assessed first.
- Civil litigation is used more as a supplementary tool for negotiation and fund recovery than as the primary means of reliance.
- Lawyers need to clearly manage client expectations and avoid misinterpreting "the existence of procedures" as "the inevitable outcome".
(iv) Advanced Practice: Towards "Critical Judgment"
Many cases, even with the most meticulously prepared materials, can still get stuck. The reason is usually not the level of effort, but rather a few critical judgments:
- How exactly is the nature of the behavior understood (fraud vs. dispute; organizer vs. intermediary; beneficiary vs. tool)?
- Can the risk structure be identified in advance (profit commitment, collection node, exchange access, evidence of control)?
- Did we seize the window of opportunity (the freezing point, the investigation point, and the main body locking point)?
These judgments are not written in the legal provisions, but they determine the course of the case.
From "What can be done?" to "When can it be done?": Turning key judgments into reusable methods
Returning to the three cases mentioned earlier, a commonality emerges: many cryptocurrency-related cases are not "without rules," but rather there are gaps between the rules —the nature of the crime, jurisdiction, evidence, and asset control points, each of which can potentially halt the progress of the case.
A more realistic point is:
Even if the lawyer prepares the materials perfectly, the case may still get stuck at a certain point—not because of a lack of ability, but because it encounters several types of "critical judgments":
- Is this considered fraud or a transaction dispute?
- Can the responsible party be identified?
- Is the asset control window still open?
These judgments are difficult to explain with a single sentence of experience, nor can they be directly derived from a few legal provisions. It's more like a "craft" of case handling: the same facts can be interpreted differently by different people – some can present a case-filing structure, while others can only describe it as a "suspected dispute." The difference often lies in how the evidence is organized, how the process is sequenced, and how crucial the key moments are.
Therefore, the purpose of this closed-door seminar/practical training we arranged in Zhengzhou this year is not to "explain the concepts again," but to break down these judgments and transform them into working methods that lawyers can directly use:
- Focus on the points most prone to misjudgment and most influential on the outcome: when to prioritize criminal proceedings, when to strive for preservation of assets, when to use civil proceedings as a supplementary tool, and when to adjust strategies.
- The system breaks down the organizational structure of criminal entry points, jurisdictional leverage, asset control nodes, and evidence closure loop;
It not only explains the basic logic of the industry and trading system, but also presents a reusable framework for the high-risk structures in cryptocurrency-related cases, the application of charges and defense strategies, and the methodology for key stages in case progression. The goal is simple—to put you back into practice, enabling you to handle consultations and manage cryptocurrency-related criminal cases more effectively.
