Chinese Student’s Crypto Fraud Sentencing Sparks Legal Debate

Chinese College Student's Cryptocurrency Fraud Conviction Raises Legal Debate

Background

In 2022, Yang Qichao, a student at Zhejiang University in China, issued a virtual currency token, BFF. However, shortly after its issuance, Qichao withdrew liquidity, causing an investor, Luo, to lose 50,000 BSC-USDT coins exchanged for the tokens. Luo subsequently filed a complaint, leading to Qichao's arrest and conviction for cryptocurrency fraud.

Legal Concerns

Qichao's sentencing to 4.5 years in prison and a 30,000 Yuan fine has sparked legal debate. Allegations of fraud surrounding the creation and trading activities of the BFF token have raised concerns.

Yang Qichao's Defense

Qichao's defense attorney has cited a 2017 Chinese regulatory law that states token issuance is illegal and risks borne by investors. However, the law does not explicitly define "token issuance."

Additionally, the defense has argued that BFF coins existed before Qichao's issuance, and virtual currency platforms allow for multiple coins with identical names but unique contract addresses and liquidity.

Furthermore, the defense has refuted the prosecution's claim that Luo lost money, asserting that he profited from trading the virtual currency.

Conclusion

The case of Yang Qichao has highlighted the legal uncertainties surrounding cryptocurrency regulation in China. The debate underscores the need for clear guidelines and definitions to prevent future legal disputes in this rapidly evolving industry.