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What you may be facing
The client conducted cross-border "offsetting" currency exchanges using virtual currencies such as USDT, involving a huge amount (e.g., exceeding RMB 200 million), and was prosecuted by the procuratorial organ for the crime of illegal business operations. During the trial, the defense team intervened, and the court ultimately sentenced the client to probation. The client wishes to understand the specific conditions and defense strategies for seeking a suspended sentence in such illegal business cases involving high amounts.
Why this needs attention
Cross-border currency exchange activities involving virtual currencies are often classified as the crime of illegal business operations, and the amounts involved are frequently substantial, leading to a common perception of a high risk of severe punishment. However, cases disclosed by the Jing'an District People's Procuratorate in Shanghai indicate that even with amounts exceeding RMB 200 million, defendants may still receive suspended sentences. Clarifying the underlying legal logic and key defense strategies helps clients and their families understand sentencing factors in judicial practice, thereby avoiding blind panic or improper responses.
What you can do now
- Verify the nature of the transactions: Confirm whether the activity constitutes a typical "offsetting" model, where RMB is paid domestically and foreign currency is received abroad, or vice versa, with virtual currencies such as USDT serving as the medium for value transfer, rather than direct fiat currency exchange.
- Examine subjective intent: Assess whether the client knowingly violated national foreign exchange management regulations, whether there was an intent to profit, and whether there are statutory mitigating circumstances such as voluntary surrender or truthful confession.
- Quantify mitigating circumstances: Focus on reviewing the restitution and compensation made, the signing of plea agreements for leniency, and the client's role and status in joint crimes (e.g., whether they were an accessory or an employed individual).
- Refer to similar case defenses: Draw upon the defense review approach of Attorney Shao Shiwei’s team in this case, emphasizing that although the amount involved is huge, a suspended sentence may be sought if significant mitigating circumstances exist and the social harm is relatively controllable.
- Compliance rectification recommendations: Immediately cease any form of underground banking or offsetting currency exchange activities, and consult professional lawyers for criminal risk isolation and compliance rectification.
According to current Chinese laws and regulations, unauthorized buying and selling of foreign exchange, disguised buying and selling of foreign exchange, or speculative trading of foreign exchange that disrupts the order of the financial market, if the circumstances are serious, constitutes the crime of illegal business operations. Using virtual currencies such as USDT for cross-border offsetting exchanges essentially circumvents national foreign exchange supervision and is largely recognized as illegal business conduct in judicial practice. The application of suspended sentences strictly follows Article 72 of the Criminal Law, requiring simultaneous satisfaction of conditions such as minor criminal circumstances, demonstration of repentance, no danger of reoffending, and no major adverse impact on the community where the sentence is declared. Even if the amount involved is huge, if statutory mitigating circumstances (such as being an accessory, voluntary surrender, or meritorious service) and discretionary leniency factors (such as full restitution and pleading guilty and accepting punishment) are present, the court may still reduce the penalty within the statutory sentencing range and apply a suspended sentence. Specific case outcomes depend on the completeness of the chain of evidence and the effectiveness of the defense; no specific judgment result can be guaranteed.
