The Truth and Warning of the "Hangzhou Investigation" Incident in the Encryption Industry

Recently, news regarding the Hangzhou police conducting systematic investigations on encryption practitioners has attracted widespread attention in the industry. After multiple verifications and confirmations, this information has been confirmed to be false. This article will analyze the truth of the incident and provide some important warnings for practitioners in the encryption industry.

Unveiling the Truth of the Event

According to reliable sources, there has indeed been a case in Hangzhou involving a large encryption cryptocurrency team, which may involve foreign exchange-related crimes, with the specific charge likely being illegal business operations. The so-called "investigation" information that circulated online before may have originated from the process of involved personnel or witnesses cooperating with the public security organs in the investigation.

Multiple sources indicate that certain encryption industry practitioners in Hangzhou have been out of contact for several days, and the teams these missing individuals belong to are relatively large. Therefore, it can be inferred that this incident is actually an investigation targeting specific involved teams, rather than a comprehensive sweep or crackdown on the entire encryption industry.

Warning to the encryption industry

1. Regulatory Red Line

Practitioners in the encryption industry must clearly understand the current regulatory bottom line. The following behaviors are explicitly prohibited in the mainland:

• Exchange of virtual currency and fiat currency
• Exchange between virtual currencies
• Act as a central counterparty for trading virtual currencies
• Provide information intermediary and pricing services for virtual currency transactions
• Token issuance financing and virtual currency derivatives trading
• Establish a trading platform and provide services to mainland residents
• Provide various services for overseas virtual currency exchanges.
• Use terms like "virtual currency" and "encryption currency" to register a company.
• Engaging in virtual currency mining activities

It is important to note that although these prohibited behaviors stem from normative documents of regulatory authorities, they are often used as enforcement and judicial basis in practice. However, in criminal cases, it is still necessary to strictly adhere to the principle of legality.

2. Strategies for Responding to Investigations

If you unfortunately encounter a criminal investigation, you can refer to the following suggestions:

• Clarify your role: Confirm whether you are being investigated as a witness or a suspect.
• Pay attention to the investigation location: witnesses can cooperate with the investigation in more flexible locations, while suspects must do so at designated locations.
• Attention to investigation time: The first investigation of the suspect usually does not exceed 12 hours, with a maximum of 24 hours.
• Verification and investigation procedures: Ensure the legitimacy of the investigators' identities, relevant documents, and paperwork.

Conclusion

In the current severe regulatory environment, professionals in the encryption industry should act with caution. When disseminating information, it is essential to verify its accuracy. If legal issues arise, it is advisable to consult a professional Web3 lawyer immediately for the most appropriate guidance and assistance.