Source: Mankiw Blockchain Law
1. Is it legal to be a U-commerce business in my country?
What is a U business? It refers to currency dealers who earn the price difference by buying and selling USDT. USDT (Tether) is a stable currency, directly benchmarked against the U.S. dollar, so doing business with U.S. merchants can be said to be a sure profit but no loss. For example, if you buy u at 6.7 and sell at 6.73, you earn 3 points. If you buy and sell 100,000 u in a day, you can earn 3,000 a day.
So, is it legal to doU business in our country?
According to the spirit of the "Notice on Further Preventing and Dealing with Speculation Risks in Virtual Currency Transactions" (hereinafter referred to as the Notice) issued by the Central Bank and other ten departments on September 24, 2021, virtual currency-related business activities are illegal Financial activities are to prevent and deal with the risk of speculation in virtual currency transactions, and to prevent virtual currencies from becoming a tool for illegal and criminal activities such as gambling, illegal fund-raising, fraud, pyramid schemes, money laundering, etc. It is prohibited for any person or organization to provide services related to virtual currencies to the public Related business activities or services.
Article 4 of the notice also clearly stipulates that there are legal risks in virtual currency transactions. Personal investment in virtual currencies is not protected by law because it violates public order and good customs.
“(4) There are legal risks involved in participating in virtual currency investment and trading activities. Any legal person, unincorporated organization or natural person investing in virtual currency and related derivatives violates public order and good customs , the relevant civil legal acts are invalid, and the resulting losses shall be borne by them themselves; those suspected of disrupting financial order and endangering financial security shall be investigated and dealt with by relevant departments in accordance with the law.”
< p>However, the notice does not restrict virtual currency transactions between individuals, that is: "It is not a crime if there is no express provision in the law." In other words, fiat currency transactions and currency transactions between individuals are
currently allowed and are not restricted by law.
Just because this behavior is not encouraged or protected by the state, there are many legal risks in doing U business in practice.
2. What pitfalls will you encounter when doing U business?
U merchants can be divided into on-site U merchants (trading in the exchange, you need to pay the exchange margin) and over-the-counter U merchants (not through the exchange, both parties trade offline, you can It can be a cash transaction, or it can be a transaction in other ways agreed by both parties). Both modes have their own advantages and disadvantages.
In short: The biggest risk for on-site Utraders is "getting caught", and off-site U< The biggest risk for /strong>business owners is “getting cheated”.
The following examples are used to explain.
1. Getting caught
The risk for U-business merchants in the venue is that they receive "black money" and their bank cards are frozen. Although conducting KYC audits on users is a basic ability necessary for a qualified U-merchant, the sources of transaction funds for U-merchants are nothing more than currency speculation, online gambling, pyramid schemes, telecommunications fraud and other types. Bank flow can easily trigger anti-fraud measures by banks. The system was judicially frozen by the public security and other departments.
In addition to the high risk of being "frozen", if the source of funds is suspected of gambling, fraud, etc., it may constitute a crime of money laundering, concealing or concealing criminal proceeds (crime of concealment), or assisting information Crimes of cybercriminal activities (crimes of aiding and trusting), etc.
For example, in a case from the Xi’an Court in 2022 [Case No. (2022) Shaanxi 0104 Xingchu No. 219], the two defendants acted as virtual currency acceptors (U merchants) by buying low and selling TEDA high. During this period, two people were caught for receiving 50,000 yuan of fraudulent funds from their bank cards. The two returned the defrauded funds to the victim and obtained forgiveness, but they were still convicted of the crime of collusion by the court and were sentenced to one year and nine months in prison respectively.
2. Being deceived
The profits of U-businessmen off-site are much higher than those on-site. For example, they earn 3 points on-site and 3 points off-site. Mao is no surprise. So why would anyone be willing to sell U at a low price outside the market? We mentioned above that since U-commerce merchants on the market are all trading online, some risks are indeed difficult to guard against when being "monitored" by exchanges, banks, public security anti-fraud centers, etc. The advantage of over-the-counter U-commerce merchants is that the two parties can communicate offline, such as in cash, "paying money with one hand and handing Us with the other", then it can be ensured to the greatest extent that the card will not be "frozen", but if it is "made Game", you can only suffer the loss of being dumb.
For example, as a currency dealer, you saw the information posted by Xiao Wang about collecting U in cash at a high price (a reasonable price slightly higher than the market price), so you contacted Xiao Wang and the two parties agreed on an offline transaction. You give U to Xiao Wang on the spot, and Xiao Wang will hand over the cash on the spot. At the appointed time to meet offline, Xiao Wang informs you that he is on a temporary business trip and asks his friend, the little prince, to come to the scene to trade with you. After the meeting, the handover went smoothly. You got the cash the little prince brought, and the little prince also received the U.
After some time, Xiao Wang contacted you again to collect U. The transaction method was the same as above, but the little prince still came to the scene. Based on the trust relationship between the two parties in the previous transaction, you transferred U to Xiao Wang, but this time, the little prince refused to give you the cash. So you immediately contacted Xiao Wang to inquire about the situation, but this time Xiao Wang lost contact...
In this incident, the little prince was actually a currency dealer who had never met Xiao Wang before. Among them, you transferred U to Xiao Wang, and Xiao Wang (in order to deceive your trust) immediately transferred U to the little prince. Xiao Wang used the method of cheating on both sides, claiming to the little prince that he could sell him U at a low price, and let the little prince come to the scene to trade with you.
At this time, if you take the money brought by the little prince by force, it may constitute a crime of robbery, because the little prince did not receive u, and if you give up, you will lose the money transferred to the little prince. Wang hundreds of thousands of U. If you go to the public security bureau to report a case and say that you have been defrauded of hundreds of thousands worth of U, the police will ask, what is your basis for claiming that you lost hundreds of thousands worth of money? (After the issuance of the "Notice on Preventing Bitcoin Risks" in 2013 and the "Announcement on Preventing Token Issuance Financing Risks" in 2017, my country has completely prohibited any entity from engaging in the issuance, exchange, pricing, and information of digital currencies. Intermediary and other services.
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