On November 28, 2025, the People's Bank of China, together with thirteen departments including the Ministry of Public Security, the Supreme People's Court, and the Supreme People's Procuratorate, convened a "Coordination Mechanism Meeting on Combating Virtual Currency Trading and Speculation." The meeting reiterated that virtual currency-related business activities constitute illegal financial activities and emphasized maintaining a high-pressure crackdown on all types of virtual currency trading and speculation. The following day, the first "Criminal Law + Web3" professional forum in Zhengzhou, jointly hosted by Shanghai Mankiw Law Firm and Beijing Dongwei (Zhengzhou) Law Firm, successfully concluded. At the forum, Shao Shiwei, head of the Criminal Department of Shanghai Mankiw Law Firm, shared in-depth insights on virtual currency crime practices and regulatory trends, which highly aligned with the policy signals released at the meeting. This article will focus on Shao Shiwei's forum presentation, providing a professional interpretation of this coordination mechanism meeting, outlining the changing trends of criminal risks in the Web3 field, and exploring strategies for criminal lawyers in defense practice.
1. **Regulatory Stance: Continuing the High-Pressure Stance, Unwavering Determination to Combat Violations**
The meeting clearly pointed out that it will continue to implement the spirit of the 2021 "Notice on Further Preventing and Handling Risks of Virtual Currency Trading and Speculation," resolutely cracking down on virtual currency trading and speculation, and rectifying market chaos. It is worth noting that the participating departments at this meeting were broader than in the past, with the deep involvement of judicial departments such as the Ministry of Public Security, the Supreme People's Court, and the Supreme People's Procuratorate, marking a comprehensive rise in the fight against virtual currency crimes from the financial regulatory level to the level of criminal justice collaboration.
From Governor Pan Gongsheng's statement at the Financial Street Forum on October 27, 2025, to the convening of this coordination mechanism meeting, it is not difficult to see that the national-level determination to combat virtual currency crimes is consistent and continuously strengthened.
As lawyer Shao Shiwei pointed out at the Zhengzhou Forum, since 2017, the regulatory attitude has evolved from "wait-and-see exploration" to "drawing clear red lines," and then to "comprehensive crackdown and deepening understanding." (Shao Shiwei's "Three-Stage Regulatory Evolution Theory" presented at the forum) Especially after 2021, with the issuance of the "924 Notice" and the in-depth implementation of the "Card Breaking Action," black and gray market funds began to use stablecoins such as USDT on a large scale for money laundering and illegal cross-border settlements, further highlighting the harmfulness of virtual currency crimes. Meanwhile, the historical risks accumulated by Web3 projects that grew wildly during the early "compliance loophole" are now entering a period of concentrated outbreak. The accountability chain of law enforcement agencies has penetrated to the technical execution and business promotion stages within the country. A large number of technical teams, business development, and marketing personnel who previously served on related projects have become the primary targets of accountability. The meeting pointed out that "virtual currency speculation has resurfaced, and related illegal and criminal activities occur from time to time, posing new situations and challenges to risk prevention and control." The so-called "new challenges" are manifested in practice as the increasing professionalization and concealment of criminal methods. At the forum, lawyer Shao Shiwei focused on analyzing a typical business chain of illegal foreign exchange trading using virtual currencies: using USDT as a medium, a "domestic-foreign offsetting" model is employed to achieve cross-border fund transfers without any actual physical flow of funds. This type of activity is highly concealed and involves large sums of money, making it one of the mainstream channels for underground banks and money laundering crimes. (Image of USDT-based cross-border offsetting foreign exchange transaction chain) Furthermore, with the emergence of new concepts such as RWA and PayFi in the Web3 field, the forms of crime are becoming increasingly complex. This places higher demands on law enforcement agencies' on-chain traceability capabilities, electronic evidence preservation, and cross-border investigation mechanisms. Currently, my country's law enforcement agencies have been accumulating experience in practice. Lawyer Shao Shiwei, drawing on his own experience handling cases, pointed out that in major cases such as cross-border online gambling and cryptocurrency pyramid schemes, public security organs have gradually explored effective pathways for collaborating with overseas exchanges to track on-chain funds and collect evidence. The meeting emphasized the need to "focus on key links such as information flow and capital flow, strengthen information sharing, and further enhance monitoring capabilities." Lawyer Shao believes this means that judicial organs will further intensify their crackdown on the transfer and laundering of illicit funds, especially targeting the on-chain circulation paths of stablecoins such as USDT, and will utilize technologies such as KYT and address profiling to conduct penetrating analysis. The case of "concealing crimes related to the buying and selling of USDT," shared by Zhou Fang, director of the Wuzhi office of Henan Yingyu Law Firm, at the forum, is a microcosm of this trend: virtual currency activities in county-level areas are often closely intertwined with gray industrial chains such as "money laundering" and "currency exchange." Through the typical case of a young man from a small town who was ultimately identified as a channel for fraudulent funds after exchanging USDT for others and charging a small handling fee, the case also reveals the widespread lack of legal awareness among grassroots participants and reflects that law enforcement agencies' monitoring of "fund flows" has been reduced to sporadic transactions at the county level. 4. **Future Trends: Comprehensive Upgrade of Regulation, Web3 Criminal Defense Will Become More Refined** From the 2013 "Notice on Preventing Bitcoin Risks" to the 2017 "94 Announcement," and then to the 2021 "924 Notice" and this joint meeting of thirteen departments, it can be seen that my country's regulatory policies on virtual currencies are constantly being upgraded, the scope of crackdown is continuously expanding, and law enforcement methods are becoming increasingly stringent. Against this backdrop, lawyer Shao Shiwei pointed out in the forum's roundtable discussion that future Web3 criminal cases will show a development trend of "increasing number and diversified types." Lawyer Shao stated that virtual currency theft and fraud cases that previously failed to be filed due to difficulties in securing evidence and disputes over the nature of the crime are now seeing a significant increase in the enthusiasm for filing cases as public security organs improve their understanding and tactics. In the future, in addition to the currently prevalent crimes of aiding and abetting fraud and concealing criminal activity, cases involving virtual assets such as theft, fraud, and embezzlement will also emerge in large numbers, further extending criminal risks to the entire chain of Web3 project development, operation, and trading. 5. **In Conclusion** The recent meeting of the People's Bank of China's Coordination Mechanism for Combating Virtual Currency Trading and Speculation serves as a clear warning again about the criminal risks in the virtual currency and Web3 fields, and sets the tone for the next stage of enforcement actions. However, the increasing specialization, cross-domain nature, and technological sophistication of criminal methods also place higher demands on the professional competence of lawyers. Attorney Shao believes that only by being familiar with industry operations, understanding technological logic, and deeply cultivating criminal expertise can lawyers achieve effective communication and meticulous defense in increasingly complex virtual currency cases, truly safeguarding the legitimate rights and interests of their clients, and contributing the professional strength of lawyers to the standardized development of Web3 in the Chinese context. Special Note: This article is an original work by Attorney Shao Shiwei and represents only the author's personal views. It does not constitute legal advice or opinion on any specific matter.
Catherine
Kikyo
Anais
Weatherly