What are the legal risks of borrowing your identity for KYC real-name authentication on the exchange?

Source: Lawyer Liu Honglin

Introduction

In recent years, countless legends of getting rich in the currency circle have attracted more and more people. Many people are involved in it, but in view of the current policy environment in my country, virtual currency exchanges do not conduct business in China. Based on operational compliance requirements, many virtual currency exchanges registered overseas do not support the identity registration or real-name of Chinese citizens. Certified KYC (Know Your Customer), it is said that there are policies above and countermeasures below. Difficulties cannot stop those who speculate in cryptocurrencies, so friends with "knowledge" have purchased overseas identities and KYC, and then participate in virtual currency investments and transactions.

However, in recent years, routines involving KYC have appeared frequently, such as the previously famous Pi coin scam. That is, once you log in to the "Pi KYC Special Edition" APP built by the scammer and complete the KYC certification guided by it, then the account will be It has been mastered by others and may be harvested at any time.

Lawyer Mankiw has also contacted many clients to inquire about KYC matters. Some people are asking questions, and some are asking for help after being deceived. We have compiled a few representative questions to share with you here.

01 A certain platform cannot register a domestic identity. There are intermediaries who advertise that they can help register an overseas identity and pass KYC. Is it reliable to invest on behalf of others?

The currency circle is a mixed bag. When encountering such an intermediary, we can only advise our interested friends to be cautious and cautious.

First of all, most of the people who need this kind of service are novices in the currency circle or middle-aged and elderly friends who are not familiar with operations, and they lack the ability to identify authenticity in the currency circle itself. Under the introduction of relatives, friends or "mentors" in your circle of friends, you might have wanted to join the currency circle, but you may have plunged into the capital market. Your real money investment has been shown as "to be harvested" in the eyes of scammers.

Secondly, even if the intermediary does register and invest on an overseas platform, and even receives regular or irregular income, there is still a risk that it will be difficult to defend rights after being defaulted.

Lawyer Mankiw recently encountered a case in which the client was introduced by a friend and entrusted the friend to register a platform account and handed over tens of thousands of yuan in principal to the friend for management. In the early stage, I received transfers from friends from time to time, saying that they "made money". When I was happy, I invested tens of thousands of yuan. Later, I needed money urgently and wanted to withdraw cash, but my friends told me that it had been misappropriated and there was no money to return.

If the intermediary is in China, you can choose to report the case, sue, etc. to protect your rights. However, at present, public prosecutors and judicial organs across our country have quite different understandings of the property attributes and legal status of virtual currencies. When reporting a case, you may be told that it is a civil dispute and it is recommended that the case be resolved through litigation and the case will not be filed. If you file a lawsuit, you will also face the problem that "virtual currency investment is not subject to legal restrictions." Even if the case is not filed due to "legal protection", even if the case is finally accepted by the court despite all difficulties and dangers, the issue of return of investment funds will still face three judgment tendencies: full refund, half-share, and no refund.

In short, no matter how much energy, financial resources, and time are invested in later rights protection, no one can guarantee the results. This is still based on the situation that the intermediary can find people in the country. If the intermediary is overseas, then you can only pray to the intermediary. Conscience found out.

02 I only entrust an intermediary to register and verify KYC. What if I control the account myself?

We believe that this is also a high-risk behavior. Even if you have the account password and other information, you will not be able to sit back and relax.

As the saying goes, "Beware of others is essential." If your intermediary is disguised as a scammer, he will complete registration and KYC certification for you in the early stage, and provide various considerate services, for fear that you will not be able to use your account. But when you invest heavily in the account you manipulate and the account is "fatted", the so-called "intermediary" can retrieve the account at any time through other authentication methods and transfer the assets in the account. Maybe the account will be given to the next one. In the hands of the victim, after all, the KYC of the account is not your true identity. The risks involved must be guarded against.

03 I used someone else’s identity to trade, and my uncle told me that I was involved in illegal and criminal activities. What should I do?

Many friends just want to do simple transactions without any serious intentions, but suddenly their cards are frozen and their uncle tells them that they are involved in illegal activities, and they are asked to cooperate with the investigation, and are even listed as criminal suspects.

In this case, the risk may come from the transaction itself or from the intermediary that previously performed KYC certification on your behalf. If it comes from transaction behavior, if it is an OTC currency dealer, then the relevant transaction behavior may be suspected of criminal crimes such as the crime of trust, concealment, fraud, opening a casino, etc.; if it is an ordinary user, then there is a high probability that it is because of receiving black money. If it comes from an intermediary, it may be a matter of account identity, but it is more likely that you were implicated after the intermediary itself was involved in illegal and criminal activities and was investigated by the public security organs.

If you are informed that you may be involved in illegal and criminal activities, you first need to actively contact the case-handling agency (it is recommended to contact by phone first) to understand the specific situation, such as: which case-handling agency it is, what kind of crime is suspected, What is the amount involved, what level of card is the blocked card, etc., the more detailed the better.

Secondly, it is necessary to promptly retain relevant transaction records and the identity information and chat records of counterparties, as well as the intermediary’s identity information, source channels, chat records, etc. These materials are useful in supporting one’s non-criminal subjective intention, This is important when you are not aware of the illegal and criminal activities you may be involved in.

If you are not sure how to communicate with the case-handling agency or are worried that your expression will not be effective and accurate enough during the communication process, it may be more appropriate to consult a professional lawyer before communicating, or to find a lawyer to communicate on your behalf.

04 Written at the end

In view of the current currency environment In addition to the difficulty of safeguarding rights mentioned above, borrowing someone else’s KYC identity on the exchange to participate in transactions is indeed a high-risk behavior. Not only do you need to worry about the safety of your principal, but you also have the risk of being involved in criminal punishment, so please be cautious! Lawyer Mankiw suggested that if there is indeed a need to invest in virtual currencies, try to choose formal trading channels and never trust so-called "intermediaries" to avoid "losing both your wife and your army" in the end, which is not worth the gain.