TG, USDT, and cash exchange are under the spotlight of the Supreme People's Procuratorate

Author: Liu Yang

On August 5, the official WeChat account of the Supreme People's Procuratorate published an article:Is it a cover-up or fraud?The procuratorate changes the characterization and precisely prosecutes.On August 1, the trial of the fraud case involving Lin and Wu, prosecuted by the Jiaocheng District Procuratorate of Ningde City, Fujian Province, began. The Sixth Review Group of the Supreme People's Procuratorate reviewed the prosecutors' performance in court. The article mentioned that "this is also the final stop of the sixth review group's review of criminal cases in Fujian to support public prosecutions." Coincidentally, both the first and final battles were related to virtual currency. The national procuratorial organs' review of criminal cases in court to support public prosecutions was launched on April 2, 2025. The first case launched focused on virtual currency. I also wrote a special article about the first case: The first case reviewed by the Supreme People's Procuratorate for public prosecution involves virtual digital currency. The final battle once again focused on virtual currency, especially USDT, including the commonly used TG in the circle. This is not a coincidence, but the "attitude" released by the Supreme People's Procuratorate. The leaders participating in this review were of a higher standard than those in the first round. Two vice-ministerial-level officials, Miao Shengming, member of the Party Leadership Group of the Supreme People's Procuratorate and Deputy Procurator-General, and Hou Jianjun, Secretary of the Party Leadership Group and Procurator-General of the Fujian Provincial People's Procuratorate, were in charge. In addition, over 50 people, including deputies to the National People's Congress, deputies to the Fujian Provincial People's Congress, members of the Fujian Provincial Committee of the Chinese People's Political Consultative Conference, relevant leaders from the Supreme People's Procuratorate's Ordinary Crime Procuratorate Department, and relevant personnel from the three-level procuratorates in Fujian Province, participated in the review. The facts of the case under review are as follows: In October 2024, Lin and Wu joined the "National Home U Replacement" group. In the group, the two individuals "accepted orders" to help telecom fraudsters receive cash packages sent by victims or directly collect cash from victims, then deliver the money to the designated location. After the transaction, Lin would deduct 2% of the total amount of the transferred funds as a reward. From November 11 to December 5, 2024, Lin, either alone or with Wu, instructed several minors to collect money from victims in Xiamen, Fujian, Nanchang, Jiangxi, and Chengdu, Sichuan, totaling 3.3541 million yuan. Of this, 2.32 million yuan was intercepted by police during collection and no one actually received it. Wu's involvement in the crime totaled 592,200 yuan, of which 50,000 yuan was also intercepted by police during collection. In less than a month, the two individuals earned a total of 20,682 yuan, all of which they used for daily expenses. Simply put, they took orders in a TG group to buy and sell USDT offline. They had been doing this for less than a month, making little profit, and were arrested. Lawyer Liu Yang repeatedly warned on his official account: First, buying and selling USDT offline is a taboo, as it's the easiest way to get arrested, even with cash. Second, buying and selling USDT offline is extremely risky because you don't know where the other party's money or USD comes from, and it's very likely not easy. On March 27 of this year, the Jiaocheng Branch of the Ningde Municipal Public Security Bureau transferred the cases of Lin and Wu to the Jiaocheng District Procuratorate for review and prosecution on suspicion of concealing and hiding criminal proceeds. The Duty and Economic Crimes Prosecution Department of the Jiaocheng District Procuratorate actively guided the investigation, compiling evidence demonstrating the defendants' subjective knowledge, use of fraudulent rhetoric, and disguised identities in collecting money from victims. They constructed a targeted system of proof, emphasizing that the defendants were accomplices to the crime of fraud, rather than concealing or hiding the proceeds of crime. Ultimately, Lin and Wu were prosecuted for suspected fraud. The identification of these individuals as accomplices in this case differs slightly from other offline U-trading cases. The court proceedings revealed that the "takers" assembled by the defendants in this case had direct contact with the victims of the fraud. The defendants knowingly helped others collect the money defrauded from the victims and instructed the "takers" to disguise themselves as customer service representatives to gain the victims' trust. Liu Lu used to call this kind of behavior "making damn money."

As for how the leaders commented on this case, you can go directly to the Supreme People's Procuratorate's official account to see it, so I will not elaborate here. Here, Lawyer Liu would like to share a few more observations based on this case:

First, I would like to reiterate the legal risks of offline USDT trading. I thought no one would do such a foolish thing, until a few days ago, a lawyer approached me and said a relative of theirs had been arrested for an offline cash-to-USDT exchange. He asked me what to do. I suggested turning himself in, because I had heard about that case. The client first deposited USDT with Huiwang Guarantee, and then someone delivered the cash to a designated location. After the client confirmed receipt of the cash, Huiwang released the currency, and the USDT price increased by 1 RMB. What can a lawyer do in such a case? I also reminded the client to be absolutely truthful when turning himself in, otherwise simply turning himself in does not count.

Secondly, don't think that concealing the crime will be much lighter than the sentence for fraud. According to the new judicial interpretation of the crime of concealment in 2021,

Fourth, while virtual currencies have inherent sins and the Supreme People's Procuratorate and the Supreme People's Court are paying increasing attention to them, we still hope that frontline judicial authorities will screen individual cases, handle each case with caution, and leave room for new initiatives that are truly innovative, practical, and sustainable. Countries around the world are currently actively pursuing stablecoins. Although Hong Kong did not advance its stablecoin bill as planned on August 1st and did not issue licenses, it hasn't given up on the idea. Leave room for innovative technologies to thrive. Who knows if it will become the next Deep Seek?

(The author is a senior partner at Beijing Deheng Law Firm and Deputy Secretary-General of the National Criminal Commission)