Discussion on the Controversial Case of Meme Tokens

Recently, a criminal case involving the issuance of virtual currency has attracted widespread attention. This case involves a post-00s college student who issued a cryptocurrency known as "meme tokens" on an overseas public blockchain, and was subsequently accused of fraud for withdrawing liquidity. This incident has sparked discussions on whether issuing non-mainstream cryptocurrencies constitutes a crime.

What is meme token?

Meme tokens usually refer to non-mainstream cryptocurrencies with smaller market capitalizations and lower liquidity. These types of coins are often issued directly by individuals or small organizations, with most even lacking a white paper. Compared to mainstream cryptocurrencies like Bitcoin and Ethereum, meme tokens are generally considered to carry higher risks and be more speculative.

Case Overview

According to public information, in May 2022, a senior student named Yang某某 issued a cryptocurrency called BFF on a certain overseas public blockchain. This name is the same as a DAO project that was undergoing an ICO at that time. Yang某某 created a liquidity pool for this coin, but withdrew the liquidity in a short period, causing a significant drop in its value.

An investor named Luo purchased a large amount of BFF coin at the exact second when Yang added liquidity. After Yang withdrew the liquidity, Luo's investment instantly depreciated significantly. Subsequently, Luo reported to the local public security authority, claiming to have been defrauded of approximately 300,000 yuan.

Legal Disputes

The core dispute of this case is whether Yang's actions constitute the crime of fraud. The prosecution believes that Yang committed fraud by creating a virtual coin with the same name as another and withdrawing funds in a short period of time.

However, some legal experts hold a different view. They believe that this case may lack the key elements of the crime of fraud:

1. Did the victim really fall into a false perception? According to the transaction records, Luo made a purchase at the exact second Yang added liquidity, which suggests that such operational speed is more likely the result of an automated trading program rather than human intervention.

2. Luo might be an experienced "coin circle trader". Analysis shows that Luo has a large amount of investment records in meme tokens and has completed buying and selling arbitrage multiple times in a very short period, demonstrating a considerable level of professional operation.

3. If Mr. Luo did indeed use an automated trading program, then he may not have misunderstood or made an erroneous judgment due to Mr. Yang's actions.

Broader Legal Risks

Although there is controversy regarding the establishment of fraud in this specific case, it is important to note that the issuance of meme tokens may still involve other legal risks:

1. Illegal Business Operations Crime
2. Illegal fundraising crimes
3. Gambling-related crimes

It is particularly worth noting that even if a cryptocurrency is issued on an overseas public chain, as long as the project party is based domestically, it may still constitute the crime of illegally absorbing public deposits.

Conclusion

This case highlights the legal gray areas in the cryptocurrency field. As technology evolves and the market changes, relevant laws and regulations may need further refinement to address new challenges. At the same time, investors also need to enhance their risk awareness and approach high-risk investment projects with caution.