Analysis of the Boundaries between Civil and Criminal in Virtual Money Investment Disputes

In recent years, with the rise of Virtual Money, related investment disputes have also been increasing. How to define whether these disputes fall under civil categories or criminal offenses has become an urgent issue that needs clarification. This article will explore the boundaries between civil and criminal aspects in Virtual Money investment disputes through a typical case.

1. Case Overview

In a public case at the Intermediate People's Court of Foshan City, Guangdong Province, the defendant Ye was sentenced to 11 years in prison for fraud. The case revealed that from May to June 2022, Ye fabricated investment projects, promised high returns, and lured multiple victims to invest a total of 2.5 million yuan, including 500,000 yuan worth of USDT. However, Ye used most of the funds for personal consumption and repaying debts, ultimately unable to fulfill the promises.

The defendant and his defense lawyer put forward two main defense arguments: first, that the relationship with the victim is a private lending relationship; second, that the evidence is insufficient to prove that 500,000 Virtual Money was received. However, these arguments were not accepted by the court.

2. The Criteria for Determining Civil Disputes and Criminal Fraud

The key to distinguishing between civil disputes and criminal fraud lies in the subjective intent and objective actions of the perpetrator. In this case, the court's main basis for determining that Ye X某某 committed fraud includes:

1. The defendant stated that part of the funds was used to repay old debts and invest in Virtual Money;
2. Quickly purchase luxury goods after receiving the investment funds;
3. In debt and without fixed assets when receiving investment funds;
4. Monthly income is insufficient to pay for the car loan, resulting in a state of financial shortfall;
5. Create false transfer records to deal with claims;
6. Failed to actively raise funds to repay the victims before the incident.

These factors combined are sufficient to prove that Ye has the intent of illegal possession and has committed fraud.

3. Judicial Determination of Virtual Money as a Target of Fraud

It is worth noting that the court recognized in this case that virtual money can be a target of fraud. Although the defense questioned the inability to prove that the defendant received an equivalent of 500,000 yuan in USDT, the court established this fact based on WeChat chat records and the defendant's statements.

The court pointed out that virtual money has the possibility of management, transfer, and value, and can become the object of fraud crimes. This recognition is of great significance for the handling of cases related to virtual money.

IV. Definition of Investment Losses and Fraud Crimes

In practice, not all investment losses in virtual money constitute fraud crimes. Judicial authorities usually consider the following key factors when making determinations:

1. Does the actor have the intent of illegal possession?
2. Is there any act of fabricating facts or concealing the truth?
3. Did the victim dispose of the property based on a mistaken understanding?
4. Is the flow and use of funds real and legal?

The comprehensive consideration of these factors helps to distinguish between normal investment risks and criminal behaviors.

V. Conclusion

Disputes in the field of virtual money investment show a complex trend of intertwining civil and criminal issues. For investors, it is essential to enhance risk awareness, make cautious decisions, and avoid blindly believing in promotions such as "insider information" or "guaranteed profits." Once losses occur, it is also necessary to rationally assess the avenues for safeguarding rights and choose between civil litigation or criminal filing based on the specific circumstances.

Although the virtual world seems intangible, legal standards cannot be ambiguous. Only by developing within a regulated framework can we achieve a balance between technological advancement and the protection of the rule of law. For judicial practice, finding a balance between protecting investors' rights and promoting industry development remains a topic that needs constant exploration.