On July 18, the reporter learned from the Public Security Bureau of Shayang County, Jingmen City, Hubei Province that Qiu Moumou, the main culprit of the 400 billion cross-border online gambling case, has been sent for trial according to law. The police found that all transactions of gamblers were settled with a virtual currency.

The special case team followed the clues and followed the line, and successfully locked multiple virtual currency accounts involved in the case. The special case team connected with the virtual currency issuer and froze the relevant virtual currency account involved, preventing the virtual currency involved in the account worth 160 million US dollars (about 1 billion yuan) from flowing into the hands of the suspect gang. In October 2022, the People's Court of Shayang County issued a judgment to confiscate part of the frozen virtual currency according to law. This case became the first "virtual currency case" confiscated by the court in the country.

**This text is not long, but the amount of information is huge. ** There are two sentences in it that are estimated to make friends in the currency circle tremble and tremble again.

Trembling 1:** The decentralized virtual currency agreed upon, the private key is still in my hand, how can it still be frozen? **

**Trembling 2: ****The court fined and confiscated virtual currency assets, how to realize them? Will the court hoard coins or smash the market? **

Let's talk about today's article. What needs to be disclaimed first is that the relevant views of lawyer Honglin are for reference only.

**1. How is the virtual currency frozen? **

The public news did not specify which virtual currency it is, but from the description that the issuer cooperated with the police to freeze it, we can know with a high probability that it is USDT Tether.

Many people who have just entered the currency circle think that USDT is a decentralized virtual currency like Bitcoin, but it is not. Tether has nothing to do with our ideal cryptocurrency. Its issuance is not based on any mining mechanism or decentralization, but on the verbal commitment of a commercial company.

The name of the commercial company is Tether. Tether (USDT) is the token Tether USD (hereinafter referred to as USDT) based on the stable value currency U.S. dollar (USD) launched by them. 1USDT=1 U.S. dollar. Users can use USDT and USD for 1:1 exchange at any time.

Tether strictly abides by the 1:1 reserve guarantee, that is, for every USDT token issued, its bank account will have a USD 1 fund guarantee. But has the money been released? How much did you release? No one knows. After all, he will not disclose the real financial situation to the outside world. So it is completely a private company operated in a black box, and this private company is the largest trading pair of all virtual currencies in the world.

It is also based on this point that I have always felt that the next wave of thunder in the currency circle is most likely to be TEDA. After all, decentralized global virtual currency transactions rely on a centralized commercial company to make verbal promises. This is definitely an extremely funny thing. thing. So friends, don’t hoard U even if you hoard it.

Where there are people, there are rivers and lakes, and where there are rivers and lakes, there are rules. As a commercial organization, this commercial company will actively cooperate whenever judicial authorities around the world require the company to cooperate in relevant judicial work.

Therefore, whether your USDT is in a centralized exchange or in a decentralized wallet, TEDA can be controlled remotely. There are two conventional methods of operation:

**The first is marking (commonly known as poison mark). **Tether company technically marks the USDT involved in the case, telling the entire network that this thing is not clean, and any USDT that has been poisoned into any mainstream centralized exchange will trigger the risk control mechanism of the exchange, thus Let the corresponding digital asset account be frozen. Sometimes it is not only the USDT that has been poisoned, but even other digital assets under the account will be frozen. If you are a clean account that accidentally received poisoned USDT during the transaction, congratulations, you have been recruited.

**The second is that Tether directly freezes USDT. **After USDT is frozen, it will lose its circulation ability and be stuck in a wallet and cannot move.

Judging from the description of the press release, the frozen USDT involved in the case should be the second type. So we joked that after this wave of news was exposed, criminal organizations around the world are probably going to be quite disgusted with USDT.

Originally, I wanted to hold my private key and hoard virtual currency for the safety of my assets, but who would have thought that a third party could airborne and freeze it remotely? Who could stand it?

**2. How will the court deal with virtual currency? **

This case in Hubei is not just an isolated case. According to public information, in 2021, the public security organs will crack down on black and gray industries on the Internet. Aiming at the new channel of virtual currency money laundering, a total of 259 related cases have been cracked across the country, and the value of virtual currency has been confiscated. More than 11 billion yuan.

According to Article 300 of the "Criminal Procedure Law", "After the trial, the people's court shall rule to confiscate the illegal gains and other property involved in the case, except for those that are returned to the victim according to law..." Therefore, in this case, the court confiscated Virtual assets, there is nothing wrong with that.

In judicial practice, the public security organs will generally not hoard the virtual currency that the parties "voluntarily return the stolen goods" and the virtual currency confiscated and disposed of by the court in judicial judgment, but will sell it as soon as possible. However, it is not suitable for official coin speculation. After all, KYC will be a bit embarrassing, so it is generally entrusted to a third-party security company to handle it.

**The first type is exchange OTC. **The security company sells directly through the mainstream virtual currency exchange and converts it into RMB directly through OTC transactions, and then transfers it to the judiciary or the designated by the judiciary after deducting the service fee (generally more than 5% of the total transaction amount) Accounts of the local treasury.

**The second type is offline transaction. **The third-party company entrusted by the judiciary will find buyers in Shenzhen and other places, and conduct cash transactions directly. After deducting the service fee, the cash will be handed over to the judiciary or the local financial department designated by the judiciary.

**The third way is to cooperate with foreign trade companies. **Through fictitious export trade or fictitious provision of cross-border technical services, etc., let overseas companies remit money and settle foreign exchange through the SAFE, convert it into RMB, and transfer it to the judiciary or the local financial department designated by the judiciary after deducting the service fee account.

I believe that many friends will directly call experts after seeing these three modes. **

However, the legality and rationality of these three modes of operation under the legal and policy framework of China's virtual currency supervision is indeed an issue to be discussed.

But it is undeniable that, based on the principle of supremacy of practicality, this dirty work must not be done by the judiciary, and a service fee (although a bit high) should be handed over to a professional institution to handle it, so that virtual currency can become legal. It is enough to subsidize the local finance and treasury with the renminbi.

**Okay, I'm done eating melons, I hope everyone's virtual currency will be safe and sound. **

After all, according to the provisions of Chinese law, the state does not encourage currency speculation, but the legal virtual currency held by individuals is protected by law. ** Any law enforcement agency has no right to use or sell your virtual currency without an effective court judgment. **