Despite the defense’s arguments, the court upheld the initial sentence, emphasizing the fraudulent nature of Yang’s scheme.
A young Chinese college student, Yang Qichao, has been sentenced to prison for orchestrating a fraudulent cryptocurrency scheme. Yang issued a virtual currency known as BFF on the BNBChain and was accused of issuing fake tokens to deceive investors. One of the victims, identified as Luo Mou, was defrauded of over 300,000 RMB, equating to 50,000 USDT coins.
According to the local media, Yang’s fraudulent activities were discovered on May 3, 2022, after Luo Mou reported his investment losses to the Public Security Branch of the High-Tech Industrial Development Zone in Nanyang, Henan. Following this report, the police started a criminal investigation and arrested Yang in Zhejiang Hangzhou in November 2022.
Legal Proceedings
On February 20, 2024, the People’s Court of the High-tech Industrial Development Zone in Nanyang, found Yang guilty of fraud. He was sentenced to four years and six months in prison and fined 30,000 yuan. However, Yang’s defense lawyer pleaded not guilty on his behalf during the second instance hearing at the Nanyang City Intermediate People’s Court on May 20, 2024.
The defense lawyer argued that the virtual currency issued by Yang had a unique and unalterable contract address, dismissing the notion of it being a “fake coin”. The lawyer emphasized that both Yang and Luo Mou were experienced crypto traders aware of the inherent risks. Furthermore, the platform they used allowed the addition or withdrawal of liquidity at any time. Therefore, the defense states that Yang’s actions did not violate any platform rules.
They further argued that the BFF coins in Luo Mou’s possession had increased in value after the incident due to increased liquidity. Notably, his wallet still held 72,381.7198 BFF coins, which could be converted to around 64,065.7134 USDT coins, suggesting that Luo Mou had not suffered a financial loss but had instead seen an increase in value.
On the other hand, the prosecution maintained Yang’s actions as fraud. They argued that Yang misled investors by issuing a fake virtual currency and quickly withdrawing funds after the investors recharged their accounts, causing significant financial loss.
Despite the defense’s arguments, the court upheld the initial sentence, emphasizing the fraudulent nature of Yang’s scheme. Yang Qichao’s case serves as a stark reminder of the ongoing challenges and risks in the Chinese cryptocurrency market.
The case underscores the strict stance China has taken against cryptocurrency trading and mining. Since 2021, the Chinese government has imposed a comprehensive ban on all cryptocurrency transactions and mining activities. Engaging in these activities is considered a criminal offense, leading to severe penalties, including imprisonment.
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