Law

Investors' virtual currency was stolen by them through the "back door": procuratorial organs guide investigation and handle a new type of crime involving the blockchain field according to law

2023-03-21   

In order to attract investors to pledge their virtual currency in their blockchain projects, Mr. Li and others developed two sets of project codes, using technical means to transfer all the virtual currency pledged by investors, resulting in economic losses of up to 38 million yuan for multiple investors. Recently, the Intermediate Court of Chizhou City, Anhui Province, made a final ruling on the case, rejecting the appeal filed by Li and others against the original judgment of first instance, and upholding the original judgment. The pledged virtual currency was transferred away. In early June 2021, Wang, who was traveling in Chizhou, found a new project on the homepage of a popular digital wallet app while surfing the internet on his mobile phone. The project claims that investors can pledge their virtual currency and conduct "mining" within the project: return the virtual currency "G coins" issued by the project to investors based on the pledge time and quantity. Wang felt that there was a profit in this, so he invested all the virtual currencies worth 590000 yuan. The next day, Wang Mou found that all the virtual currencies he pledged had been transferred by the project party, and the website promoting the "G coin" project had also been closed, leaving the project party's responsible person unable to contact. Although aware of the possibility of being deceived, Wang still harbors a fantasy that the project will restart. However, the project did not restart until October 2021. Wang reported the case to the Guichi Branch of the Chizhou Public Security Bureau. Upon receiving the report, the Guichi Branch of the Chizhou Public Security Bureau attached great importance to the investigation and immediately launched the case investigation work, requesting the Guichi District Procuratorate to intervene in advance. Develop two sets of codes to leave a "back door" for crimes. "If the developer can easily transfer the virtual currency pledged by investors, wouldn't investors be suspicious?" After being invited to intervene in advance, the handling prosecutor of the Guichi District Procuratorate discovered the key points of the case after reviewing the files. After examination, the undertaker prosecutor found out that in March 2021, in order to obtain illegal benefits, Mr. Li and others developed a blockchain virtual currency investment project with a "back door" function (i.e., the developer can withdraw the virtual currency pledged by investors in the project without the consent of the investors), namely, a "G currency" project. Since then, Mr. Li has successively invited Mr. Liu and Mr. Ye to invest in shares, and found Mr. Song and Mr. Yuan respectively. Mr. Song will write two sets of project contract codes with and without the "back door" function, and Mr. Yuan will write the front-end webpage of the project. Liu, Ye, Song, and Yuan, who are aware that the project has a "back door" function and may cause property losses to investors, still invest and provide technical support. In order to gain the trust of investors, in May 2021, Mr. Li and others obtained the Smart Contract Security Audit Report using the project code without the "back door" function written by Mr. Song to provide investors with a "security statement.". In late May of the same year, Mr. Song tested and deployed the contract code with the "back door" function online, opened it up, and provided the contract address to Mr. Li after modifying it according to his requirements. Subsequently, Li arranged for Ye to use false identity information to shoot authentication videos for the launch of the "G coin" project, while arranging for Yuan to formally write a project webpage introduction with a "back door" function online. June 7, 2021, with“

Edit:Ying Ying Responsible editor:Shen Chen

Source:jcrb.com

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