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

Recently, there has been new progress in the "Hangzhou investigation" incident circulating in the encryption industry. After multiple verifications, this rumor has been confirmed to be false information. Information obtained from verifying with relevant judicial authorities in Hangzhou and other channels confirms that the Hangzhou police have not conducted a systematic investigation of encryption practitioners.

Event Review and Truth Exploration

On June 10th, a piece of news about the Hangzhou police conducting systematic investigations on cryptocurrency practitioners quickly spread on social media, drawing widespread attention and discussion within the industry. However, after thorough investigation and multiple confirmations, this news has been confirmed as a false report.

The actual situation may involve a larger local cryptocurrency-related team in Hangzhou that is implicated in the case, likely related to foreign exchange crimes, speculated to be illegal operation offenses. There are reports that some members of this team have been missing for several days, which could be a result of cooperating with the public security investigation. Therefore, this incident seems more like an investigation into a specific case rather than a comprehensive inquiry or crackdown on the entire encryption industry.

Warning to the Encryption Industry

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

1. Understand the regulatory red lines: The mainland has strict restrictions on activities related to encryption, including prohibiting the exchange of virtual currency with fiat currency, the exchange between virtual currencies, buying and selling virtual currencies as a central counterparty, and providing information intermediary and pricing services for virtual currency transactions.

2. Compliance operation: Avoid engaging in prohibited activities such as token issuance financing, virtual currency derivatives trading, establishing exchanges, and providing services to mainland residents.

3. Pay attention to business naming: The business name should not contain terms such as "virtual currency", "virtual assets", "encryption currency", "encryption assets", etc.

4. Exercise caution when dealing with overseas businesses: Providing services to overseas virtual currency exchanges (such as marketing, payment settlement, technical support, etc.) may also pose risks.

How to Respond to an Investigation

If unfortunately faced with an investigation, practitioners in the encryption industry should pay attention to the following points:

1. Clarify identity: Understand whether you are being investigated as a witness or a suspect.

2. Pay attention to the investigation location: Witnesses may be interviewed at their workplaces, residences, or other places, while suspects usually need to cooperate with the investigation at the case-handling authority.

3. Attention to investigation time: The first investigation of the criminal suspect usually does not exceed 12 hours and shall not exceed 24 hours at most.

4. Verification of Investigation Procedures: Ensure the legality of relevant documents such as investigators' identities, subpoenas, search warrants, etc.

Conclusion

Although the "Hangzhou investigation" incident has been confirmed as a false report, it serves as a reminder for professionals in the encryption industry to remain vigilant and strictly adhere to relevant laws and regulations. In the face of a complex regulatory environment, practitioners should act cautiously and seek professional legal advice when necessary to ensure their rights are effectively protected. At the same time, when disseminating industry-related information, a rational and prudent attitude should also be maintained to avoid causing unnecessary panic and confusion.