Recently, a case involving the crime of setting up a virtual currency casino, handled by lawyers Wu Xiaohui and Yang Fan from Gaopeng Law Firm, was successfully concluded. The case went through first and second trials, and was remanded for retrial. With the unremitting efforts of defense lawyers, the prosecution ultimately withdrew the charges and made a decision not to prosecute the two parties involved. The successful defense of this case is a defense of justice, a belief in the law, a dedication to professionalism, and an interpretation of Gaopeng Law Firm's philosophy of "integrity and professionalism".

Case Notes

In 2022, a public security organ in a certain area determined that a virtual currency exchange had gambling nature during the investigation of an online gambling case. The police targeted the actual controlling company shareholders, internal staff, and other affiliated company personnel who provided technical support to the exchange and launched an investigation. The product interface of a certain blockchain browser company was used by a virtual currency exchange involved in the case for about eight months. The two principals were the actual controllers and technical personnel of the company, and were criminally detained in August 2022 on suspicion of opening a casino. The indictment accuses the two of providing technical support to a gambling platform, constituting a joint crime of opening a casino.

When Lawyer Wu Xiaohui and Lawyer Yang Fan were entrusted, the case had already been brought to court and was approaching trial. Both parties had signed a confession and punishment agreement. Based on the review of the case files and interviews, the lawyer believed that the case was complex and highly specialized. The prosecutor accused the two parties of running a casino, and the facts were unclear and the evidence was insufficient. Therefore, the lawyer immediately submitted a legal opinion to the prosecutor and requested to withdraw the prosecution, but was unsuccessful.

At the first instance stage, the defense counsel insisted on the innocence defense of the two parties. Although there was intense trial defense, unfortunately, the first instance court did not adopt all the cross examination and defense opinions, only found that the two were accomplices with confession and other circumstances, and lenient sentencing was imposed. In December 2023, a guilty verdict was made with fixed-term imprisonment and probation. Two parties are dissatisfied with the first instance judgment and, after sufficient communication with their defense counsel, have appealed.

During the second instance stage, defense lawyers, parties, and relevant technical experts organized professional seminars on the theme of "Law+Blockchain and Virtual Currency Technology" multiple times. Based on in-depth research on the blockchain technology architecture, the backend program of virtual currency transactions involved in the case, the underlying logic of wallet and browser operations, and the profit model of exchanges, technical analysis diagrams were produced. Based on the opinions of the Supreme People's Court, the Supreme People's Procuratorate, and the Ministry of Public Security on the application of laws in handling cases of online gambling crimes (hereinafter referred to as the "Opinions on Online Gambling Crimes"), the defense opinions for the second trial have been determined, and a large amount of new evidence has been submitted to the court.

During the second instance trial, the defense counsel and technical personnel demonstrated the interface calling process of the blockchain browser and explained the technical principles, translating complex and obscure technical language into legal language, successfully persuading the collegiate bench to adopt some of the defense opinions. In June 2024, the second instance court ruled to revoke the original verdict and remand the case for retrial, marking a turning point in the case. During the period of remand for retrial, a collegial panel formed by the first instance court fully analyzed the case situation and defense opinions. After careful consideration, the procuratorial organ decided to withdraw the charges against the two parties. In late October 2024, the court ruled to allow the prosecutor's office to withdraw the prosecution, and the next day the prosecutor's office made a decision not to prosecute. After more than two years of unremitting efforts, this case has finally achieved a satisfactory result.

Experience exchange

Although the "Several Opinions on Online Gambling Crimes" have made specific provisions regarding the determination of joint crimes in opening online casinos, the particularity and complexity of this case lies in the background of blockchain technology and virtual currency transactions, and the defense counsel must have professional knowledge in the relevant field to truly achieve effective defense.

In this case, the prosecutor accuses the parties of knowingly providing technical support and illegally profiting from the exchange affiliated gambling platform involved in the case.

The three main points of dispute between the prosecution and defense are:

（1） Whether the parties involved "knew" that the virtual currency exchange involved was a gambling platform;

（2） Does the act of providing blockchain browser interfaces to exchanges for use constitute 'providing technical support for gambling platforms';

（3） Can normal equity investment activities between companies be recognized as illegal profits.

The main viewpoint of the defense counsel is:

（1） Regarding whether the parties involved were 'aware'. The "Several Opinions on Online Gambling Crimes" have made enumerated provisions, among which the provision of technical support must also have obvious abnormalities in the collection of service fees. However, in this case, there is no evidence to prove that the parties have collected obvious abnormal service fees, and the presumption of guilt against the defendant cannot be made;

（2） Regarding the provision of technical services. The legal provisions are "providing Internet access, server hosting, network storage space, communication transmission channel, advertising, member development, software development, technical support and other services for gambling websites". In this case, the blockchain browser is a widely used universal product in the industry, not designed for the development and use of gambling platforms, and has substitutability in the technical architecture of virtual currency exchanges. The call of API data interface cannot be equivalent to the technical support provided in online gambling crimes;

（3） Regarding illegal profits. Due to the fact that the actual controller of the virtual currency exchange involved in the case holds partial equity in both parties' companies, and this case has not been identified as a unit crime, the equity investment funds between the companies cannot be considered as illegal profits.

epilogue

The case has been successfully concluded, and the final decision of the prosecution not to prosecute reflects the fairness and rigor of the law. For the parties involved, it is a rebirth after a disaster. For lawyers, it is not only a long and arduous successful defense, but also a systematic study of the dual levels of "technology+law" in the field of virtual currency related crimes.

In the era of rapid digital development, many new crimes rely on Internet technology and emerging financial products, and effective defense must be based on the reserve of professional knowledge in relevant fields, which means that criminal defense lawyers face greater challenges and higher requirements.