Crypto Assets trading should be cautious: New judicial opinion strengthens regulation of cybercrime

On July 28, 2025, the Supreme Court, the Supreme People's Procuratorate, and the Ministry of Public Security jointly issued the "Opinions on Handling Criminal Cases Related to Assisting Information Network Crime Activities and Other Issues", which provides more detailed regulations on the elements of the crime of assisting information network crime activities and sentencing circumstances. This new regulation will have a significant impact on Crypto Assets trading and other activities.

Background and Main Content of the Opinion

In recent years, cyber crimes represented by telecom fraud have become increasingly rampant, and the black and gray industries surrounding telecom fraud, online gambling, pyramid schemes, and others continue to grow. Previously, judicial authorities have issued regulations regarding the legal application issues of related cases multiple times, but there are still some gray areas. For example, there is a lack of clear definitions regarding the presumption standard of "knowingly allowing others to commit crimes using information networks" and the specific circumstances of "serious situations."

The new opinion clearly stipulates the following aspects:

1. Refined the standard for determining the "knowingly" behavior of the actor, such as illegal provision of equipment software that changes the caller ID, and continuing to carry out relevant behaviors after being restricted by financial institutions and others.

2. Clarified the specific circumstances that constitute "serious circumstances".

3. Emphasize the "combination of strictness and leniency" policy, implementing severe punishment for organizations that commit crimes involving minors, while leniently handling cases where individuals are deceived into participating or where profits are minimal.

Impact on Crypto Assets Trading

Although the new regulations will not have a dramatic impact on the overall Crypto Assets industry, they will undoubtedly tighten regulation further. Specifically:

1. Trading Crypto Assets at prices that significantly deviate from the market, or engaging in behaviors such as using encryption communication software, may be regarded as "abnormal".

2. If you continue to trade after being restricted by banks, payment platforms, etc. due to fraud, and are again involved with suspicious funds, it will be easier to be recognized as "knowingly" assisting in the crime.

3. In recent years, cases involving Crypto Assets-related cybercrime activities have shown an upward trend, and new regulations may further increase the crackdown.

Advice for Practitioners

Crypto Assets holders should exercise caution when trading for liquidity, especially:

1. Avoid using trading methods that may be considered "abnormal."

2. If you have been restricted by financial institutions due to trading, you should suspend related activities to prevent further risks.

3. Strictly review the source of funds and resolutely stay away from suspicious transactions.

4. Pay attention to policy changes and adjust compliance strategies in a timely manner.

Overall, the mainland Crypto Assets ecosystem may increasingly contract. Practitioners should conduct business under the premise of legality and compliance, and always be vigilant about legal risks.