Defense practice using culpability stratification and amount limitation as its approach.
Recently,Attorney Deng Xiaoyu, a partner at Mankun (Shenzhen) Law Firm,achieved a satisfactory defense outcome in a case involvinga gold merchant in the Shenzhen Shuibei market charged with concealing and disguising the proceeds of crime.In this case, although the amount involved reached several million yuan, the client signed a sentencing recommendation for a suspended sentence during the review and prosecution stage.
The case arose from a gold merchant in the Shenzhen Shuibei market who received gold in transactions and, through a USDT dealer, liquidated the gold and converted it into virtual currency (USDT), and who was unwittingly drawn into a cross-border money laundering case (concealing and disguising the proceeds of crime). Investigation established that part of the funds was confirmed to be proceeds of telecom and online fraud. The case-handling authorities therefore opened an investigation against the merchant and related persons.
After Attorney Deng Xiaoyu's teamtook over the case, a thorough review of the case file revealed a key difference in the fund flow: the funds at issue were not directly converted into the crypto asset USDT, but were first used incash formto purchase gold, after which the client completed the transaction through USDT. On this basis, the team argued that the core money laundering link occurred inthe upstream "cash gold purchase"stage, the party's transactional conduct was at theend of the chain, precisely definingthe party's role as an accessory in the transaction chain.
On this basis, Attorney Deng Xiaoyu's team further conducted a detailed review of the amount involved in the case. By verifying the flow of funds transaction by transaction, the team successfully established thatof the several million in gold sheet material involved in the case, the amount verified and defended as proceeds of crime was less than one million, substantially lowering the sentencing benchmark. In light of the party's attitude of admitting guilt and accepting punishment, the team, focusing on"accessory status"and"amount segregation"as the core, engaged in professional communication with the procuratorial authority, and ultimately, in this case of concealing or disguising the proceeds of crime, at the review and prosecution stagesuccessfully obtained a sentencing recommendation of probation。
This case is a typical criminal risk casearising from oversights in transaction intermediation and fund-flow processes. As the complexity of combining gold transactions with virtual currencies increases, the legal risks faced by practitioners when handling large-sum funds have become increasingly prominent.
The successful defense in this case not only secured the optimal outcome for the client involved, but alsosounded a warning for gold merchants and virtual currency transaction practitioners: when conducting business, they should strictly perform due diligence and compliance obligations to prevent unknowingly becoming involved in criminal liability.
The team of Lawyer Deng Xiaoyu, a partner at Mankun (Shenzhen) Law Firm, has long focused oncriminal defense and compliance risk management in Web3.0 cryptocurrency, blockchain, emerging cybercrime, economic crime and duty-related crime.The team has a deep understanding of virtual currency-related business formats and has provided defense for a number ofexchanges, U merchants, digital asset-related project parties, internet technology companies and practitioners, with the amounts involved in the relevant cases reaching tens of billions, and has cumulatively achieved more than 50 successful outcomes including acquittals, case withdrawals, decisions not to approve arrest, non-prosecution, suspended sentences and amended judgments.
The team of Lawyer Deng Xiaoyu has always adhered to"Professional analysis, precise defense, and full commitment to safeguarding rights"is our philosophy. We are adept at identifying key defense points amid complex and intricate case facts, and through efficient communication and professional legal skills, we safeguard our clients' lawful rights and interests to the greatest extent possible.
In the future, Mankun lawyers will continue to devote themselves toWeb3.0, blockchain, and emerging cybercrime sectors, focusing on legal risk prevention and dispute resolution, helping enterprises achieve steady and sustained progress on the path of innovative development, and contributing to a clean cyberspace and a law-based business environment.
Attorney Deng Xiaoyu's cases and articles:
Cases:
- A studio case involving cheat programs for "Jianwang 3," in which a lesser-offense defense was mounted, resulting in the offense of destroying computer information systems being recharacterized as the offense of providing programs for illegally controlling computer information systems, with suspended sentences across the entire case;
- A case involving keep-alive technology suspected of destroying computer information systems, in which an innocence defense was mounted, and the public security authority terminated the investigation;
- (Online gold fraud case one) The case of Chen, who used gold to conceal or disguise proceeds, was prosecuted for two offenses—aiding information network criminal activities and concealing or disguising proceeds—and after defense, only the offense of concealing or disguising proceeds was ultimately found;
- (Online gold fraud case two) A case involving concealment or disguise of proceeds by a member of a "convoy" team, identified as c; after defense, the public security authority ultimately withdrew the case;
- A case in which a bulk SMS company was suspected of telecommunications fraud, in which an innocence defense was mounted, the characterization was changed to the offense of aiding information network criminal activities, and the public security authority subsequently terminated the investigation;
- Represented a company in a case involving suspected scraping of Xiaohongshu data, mounting a not-guilty defense; the public security authority terminated the investigation;
- Represented a company in a case involving suspected pyramid-scheme activity in Filecoin mining, mounting a not-guilty defense for an employee; the public security authority terminated the investigation;
- Represented Peng in a case involving suspected virtual-currency fraud, mounting a not-guilty defense; the public security authority terminated the investigation;
- Represented Cai in a case involving the online dissemination of obscene materials, mounting a defense seeking a lesser charge; obtained release on bail pending trial;
- In a casino-operation case involving an offshore gambling app, where the deposit and withdrawal studio was involved in gambling funds of RMB 360 million, represented the studio's person in charge, obtained a finding of accessory liability, and secured a final sentence of three and a half years;
- In a casino-operation case involving a domestic gambling app, represented a member of an illegal payment-settlement scheme group, secured a change of charge to the crime of assisting information network criminal activities, and obtained a suspended sentence.
Articles:
《Perpetual Contracts Are Not Gambling Under Criminal Law》
《The Polymarket Project's Involvement in Gambling Highlights That Contracts Are Not Gambling》
Agent ad litem
Deng Xiaoyu, Partner and Head of Criminal Practice at Mankun (Shenzhen) Law Firm. Mr. Deng specializes in criminal cases and has participated in handling nearly 300 cases, with solid theoretical grounding and extensive practical experience.
He is particularly adept in the field of Web3.0 crime and has provided criminal defense for several well-known digital currency exchanges, effectively safeguarding the rights and interests of clients. He has received the "Special Contribution Award for the 30th Anniversary of the Shenzhen Lawyers Association" and has been interviewed by several well-known domestic media outlets and invited by the industry to give lectures on multiple occasions.
About Mankun
Mankun Law Firm was established in 2015 and is a boutique law firm in China focused on the Web3.0 new economy and deeply engaged in the blockchain industry. Members of the Mankun team possess unique and diversified industry backgrounds, coming from well-known legal service institutions, state judicial organs, internet technology companies, crypto assets institutions, blockchain industry think tanks, and other organizations.
Based on a profound understanding of the new economy, continuous attention to and research on policies and regulations, and rich practical experience, the Mankun team is adept at providing comprehensive legal services from the perspectives of business models and legal practice to new economy enterprises in Web3.0, blockchain, AI, NFT, digital collectibles, crypto funds, crypto payments, DeFi, real-world assets (RWA), GameFi, and other fields, including business architecture design, project investment and financing, transaction planning, business compliance, resolution of complex civil and commercial disputes, prevention and control of criminal-related risks, and criminal defense.
Mankun Law Firm is headquartered in Shanghai and has branches in Hong Kong, China, Silicon Valley in the United States, Shenzhen, Hangzhou, Zhengzhou, Chengdu, and other locations. In response to the global compliance development needs of Web3.0 industry clients, Mankun has established local offices and selected local professional blockchain service partners in major global crypto finance cities to provide clients with professional legal and compliance services with global breadth and China depth.
