Legal risks of issuing meme tokens: Controversy over the determination of fraud.

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Discussion on the Legal Risks of Meme Tokens

Recently, a criminal case involving cryptocurrency has attracted widespread attention. A post-00s university student was convicted of fraud for issuing meme tokens on an overseas public chain and withdrawing liquidity, resulting in investor losses. Such cases are not uncommon in the cryptocurrency field, but they raise a question worth discussing: does issuing meme tokens constitute a crime, and if so, what charges should be applied?

Definition of meme tokens

Meme tokens usually refer to non-mainstream cryptocurrencies with smaller market capitalizations and lower liquidity. They are often issued by individuals or small organizations, and most of them even lack a white paper. Unlike mainstream cryptocurrencies such as Bitcoin and Ethereum, meme tokens lack widespread recognition and a stable market foundation.

Case Summary

In May 2022, a senior student named Yang issued a meme token called BFF on a certain overseas public chain. He first added liquidity and then withdrew it in a short time, causing the value of BFF coin to plummet. An investor named Luo suffered a loss of about 300,000 RMB and subsequently reported it to the police. Yang was eventually arrested on charges of fraud.

Legal Dispute Points

The key to this case is whether Yang's actions constitute the crime of fraud. According to our country's criminal law, the crime of fraud must meet the following elements:

  1. The actor has the intention of illegally possessing another person's property.
  2. Engaged in acts of "fabricating facts" or "concealing the truth"
  3. The victim was thus trapped in a misconception and suffered property loss.

The procuratorial organ believes that Yang created a false cryptocurrency with the same name as another project and induced investors to fall for it by quickly adding and withdrawing liquidity, constituting fraudulent behavior.

Another Perspective

However, there are also views that suggest this case may not fully meet the constitutive requirements of fraud.

  1. The victim may not have fallen into a misunderstanding. According to the transaction records, the victim executed the trade at the exact same second that Yang added liquidity, which suggests that this operation speed might have been achieved through automated trading programs.

  2. The victim may be an experienced "coin sniping expert". His trading records show that he has extensive experience in investing in meme tokens, and he has completed buy and sell operations multiple times in a very short period, demonstrating a professional level.

  3. If the victim is using an automated trading program, then their asset disposal actions may not be based on a misunderstanding of the project, but rather the result of a pre-set program being executed automatically.

Legal Risk Warning

Although there is controversy over whether Yang's actions in this case constitute fraud, issuing meme tokens is still a high-risk behavior. It may involve crimes such as illegal business operations, illegal fundraising, or gambling-related offenses. Especially under the current regulatory environment, whether the project operates domestically or internationally, as long as the initiator is based domestically, they may face legal risks.

Conclusion

Legal issues in the cryptocurrency field are often complex and controversial. This case highlights the challenges faced by the existing legal framework in dealing with emerging financial technologies. Both investors and project initiators should fully recognize the relevant legal risks and act cautiously. At the same time, it calls for relevant departments to formulate clearer and more applicable legal norms to better regulate and guide the development of the cryptocurrency industry.

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CrossChainBreathervip
· 07-20 04:10
Dogs are a big pit, run fast.
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MetaLord420vip
· 07-20 03:30
pump Be Played for Suckers will definitely be caught
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CryptoFortuneTellervip
· 07-17 08:11
Private sale also needs to understand the law.
View OriginalReply0
MEVHunterBearishvip
· 07-17 04:45
College students are too naive.
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BearMarketSunriservip
· 07-17 04:45
We must also focus on the implementation of regulation.
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TokenSherpavip
· 07-17 04:43
Risk at the legal boundary
View OriginalReply0
GamefiEscapeArtistvip
· 07-17 04:25
The community still needs to be further regulated.
View OriginalReply0
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