The Truth Behind the "Hangzhou Probe" Incident in the Encryption Industry

Recently, there has been new progress regarding the "Hangzhou investigation" incident in the encryption industry. After multiple verifications, including inquiries to the relevant judicial authorities in Hangzhou and information obtained from other sources, the claim that the Hangzhou police conducted a systematic investigation of encryption practitioners has been confirmed to be false information.

Event Review

On the morning of June 10, someone posted an article titled "Hangzhou Police are Conducting Systematic Investigations on Cryptocurrency Practitioners" on social media, which attracted widespread attention within the industry. This article raised concerns among many that the web3 environment in mainland China might face severe challenges. However, after in-depth analysis and multiple verifications, this claim was confirmed to be false information.

The Truth Emerges

According to reliable sources, the truth of the incident is that there is a larger local team in Hangzhou involved in encryption-related activities. This case is likely to involve foreign exchange-related crimes, and preliminary assessments may constitute illegal business operations. The so-called "investigation" information that circulated earlier may have originated from misunderstandings generated by those involved or witnesses cooperating with the public security investigation.

There are reports from two independent sources stating that individuals from the cryptocurrency circle in Hangzhou have been missing for several days, and the teams of these missing persons are not small. This information further corroborates the above speculation.

Warning to the encryption industry

Although the "Hangzhou probe" incident has been confirmed as a false report, this event still serves as a wake-up call for the encryption currency industry. Practitioners need to pay attention to the following two points:

1. Clearly understand the policy red lines of the mainland regulatory authorities.
2. Know how to respond correctly when facing investigations by judicial authorities.

regulatory red line

Currently, mainland encryption practitioners must strictly adhere to the following prohibitions:

• Carry out the exchange of virtual currency and fiat currency
• Exchange between virtual currencies
• Act as a central counterparty for buying and selling virtual currency
• Provide information intermediary and pricing services for virtual currency trading.
• Token issuance financing and virtual currency derivatives trading
• Establish a trading platform and provide services to residents in the mainland
• Provide various services for overseas virtual currency exchanges
• The company name must not contain terms such as "virtual currency", "virtual assets".
• Engaged in virtual currency mining activities

It should be noted that although these prohibitions stem from relevant regulatory documents, the principle of legality must still be strictly observed in criminal cases.

Suggestions for Responding to Investigations

If you unfortunately encounter criminal legal issues, you can refer to the following suggestions:

1. Clarify your role: Understand whether you are being investigated as a witness or a suspect.
2. Pay attention to the location of the investigation: Witnesses can cooperate with the investigation at more flexible locations, while suspects usually need to be investigated at designated locations.
3. Understand the time constraints for cooperation with the investigation: there are clear time limits for suspects, while for witnesses, it is relatively flexible.
4. Pay attention to the legality of the investigation procedures: including the identity of the investigators, relevant legal documents, etc.

Conclusion

The environment faced by domestic cryptocurrency practitioners is indeed full of challenges. When disseminating information, practitioners should be particularly cautious and it is best to publish only after verification. In case of legal issues, it is advisable to consult a professional web3 lawyer in a timely manner to obtain the most appropriate legal guidance and protection.