New Tricks of China’s Virtual Money Scams! The Fallacy of "Only Scamming Foreigners Is Not Illegal" – Guangdong Case Refutes This

The People's Court of Lechang City, Shaoguan, Guangdong Province, recently concluded a foreign-related Virtual Money fraud case. Criminal Zhang Mongsong and others utilized mobile phones and computers to bypass internet restrictions and access foreign websites, disguising themselves as financial bloggers on social media platforms to add foreign victims as friends. After gaining the victims' trust, they guided the victims to invest in Virtual Money on a fraudulent platform, thereby defrauding the victims of their property.

Virtual Money Fraud New Model: Wall-Crossing Impersonation of Financial Bloggers

As the promotion against telecom network fraud becomes deeply ingrained in people's minds, some criminals have turned their attention to foreigners in an attempt to evade legal sanctions. This new model of virtual money fraud shows that criminals are looking for loopholes in regulation and publicity, attempting to reduce the risk of being discovered and prosecuted by targeting foreign victims.

On March 9, 2024, Zhang and others used mobile phones and computers to bypass the Great Firewall to access the overseas internet, which is the first step of the entire fraud chain. The bypassing technology allowed them to circumvent China's internet firewall and directly reach potential victims on overseas social platforms. Criminals disguised themselves as finance and investment bloggers, posting seemingly professional investment analyses and market forecasts on social platforms, creating an image of professional investment advisors.

This kind of disguise is highly deceptive. Criminals meticulously design social media pages, using professional terminology and market data, and may even steal the photos and information of real financial experts. For foreigners who are not familiar with the Chinese internet environment, it is difficult to distinguish the authenticity of these accounts. After gaining the victim's trust, the criminals will guide the victim to invest in Virtual Money on a fake platform.

These fake platforms are usually well-crafted, mimicking the interfaces of real cryptocurrency exchanges, displaying real-time price fluctuations and trading records. The funds that victims “invest” on the platform actually go directly into the pockets of criminals, and the profits displayed on the platform are all false data. When victims try to withdraw their funds, they are often asked to pay various “handling fees,” “taxes,” or “margins,” ultimately discovering that they cannot retrieve their money.

Amount Involved and Sentencing: Minor Fraud is Also Heavily Punished

After investigation, a foreign victim was scammed out of 4,619.9 yuan. Although this amount is relatively small, the court still handled the case seriously, showing that the Chinese judicial authorities adopt a zero-tolerance attitude towards any form of Virtual Money fraud. Afterwards, the defendant's relatives withdrew all the funds obtained from the scam, which was considered a mitigating circumstance during sentencing.

The court, after hearing the case, believes that the actions of Zhang and others constitute fraud. Based on the specific circumstances, Lechang Court lawfully sentenced Zhang and others to imprisonment ranging from eight months to six months, along with fines. Although the amount involved is not large and the defendants have returned the stolen goods, they still received sentences of more than six months, which sends a clear legal signal: Virtual Money fraud will not be treated leniently due to small amounts or the victims being foreigners.

Sentencing Considerations in This Case

Nature of Crime: Fraud using Virtual Money, characterized by high technicality and concealment.

Victim Characteristics: Fraud targeting foreigners, exhibiting transnational crime characteristics.

Social Harm: Damages China's image on the international stage and disrupts cross-border financial order.

From the light circumstances: full refund of the stolen goods, relatively good attitude towards confession.

Sentencing Result: After comprehensive consideration, a prison term of 6 to 8 months is imposed along with a fine.

This sentencing standard shows that even small-scale Virtual Money fraud will be subject to legal sanctions as long as the behavior constitutes a crime. Criminals should not harbor the delusion of “the amount is small and will not be pursued” or “the risk of defrauding foreigners is low.”

Legal Red Line: Overseas is not a legal territory

The judge specifically reminded after the verdict: the so-called “only defrauding foreigners” is by no means a legal exemption reason; overseas is not a lawless place. Do not be misled by the fallacy that “defrauding foreigners is not illegal.” This reminder targets the erroneous beliefs held by some criminals, who think that as long as the victims are foreigners, they can escape the sanctions of Chinese law.

This cognitive error stems from ignorance of the law. According to Chinese criminal law, the constitutive elements of fraud include subjective fraudulent intent and objective fraudulent acts, as well as the consequence of causing property loss to others. The nationality of the victim does not affect the establishment of the crime. Whether the target of the fraud is Chinese or foreign, any form of telecom network fraud will violate the legal red line.

From the perspective of international law, China has jurisdiction over crimes occurring within its territory or committed by its citizens. Even if the victim is abroad, as long as the criminal act is carried out within China, Chinese judicial authorities have the right to prosecute. In addition, defrauding foreigners may also lead to diplomatic disputes and damage the national image, with its social harm potentially exceeding that of general domestic fraud cases.

Virtual Money Investment Risk Warning

The judge also reminded the public in the ruling that virtual money does not have the status of legal tender in China, and that investment and financial management should be rational and not blindly follow trends. This reminder has important practical significance. The People's Bank of China and other departments have repeatedly issued announcements clarifying that activities related to virtual money are considered illegal financial activities.

Virtual money trading is not protected by law, and participating in virtual money investment and trading activities carries legal risks. Investors need to be fully aware that the virtual money market is highly volatile, price manipulation is common, and there is a lack of effective regulatory protection mechanisms. Once encountering fraud or investment failure, it is difficult to recover losses through legal means.

Beware of unapproved “platforms” as they are key to preventing virtual money fraud. Legal financial investment platforms must be approved by relevant authorities and subject to regulation, while virtual currency transactions do not have legal status in China. Any platform that claims to facilitate virtual currency trading or investment should raise a high level of alert.

Key Features to Identify Virtual Money Scam Platforms

Promise of High Returns: Claims of “guaranteed profits”, “extremely high daily returns”, and other unrealistic returns.

Referral Mode: Requires developing downlines and recommending new users to withdraw.

Withdrawal Difficulties: Set various withdrawal thresholds, requiring payment of handling fees and deposits.

Impersonation of Professional Image: Using the identities of well-known institutions or experts for endorsement.

Inducing Wall-Breaking Operations: Requires the use of tools like VPN to access foreign platforms.

If you discover any suspicious situations, please report them to the public security authorities in a timely manner to protect your legal rights and interests. Reporting cases promptly can not only help you recover losses but also assist the police in combating crime and protecting more potential victims.