The Supreme People’s Procuratorate Discloses a U-Coin Scam Case Involving 1.2 Million Yuan: Prosecutors State That Virtual Currency Transactions Fall Outside the Scope of Regulation for Contractual Fraud

A recent case involving fraud targeting Tether (USDT) was adjudicated in Xuzhou, Jiangsu Province. According to an article published on the official WeChat account of the Supreme People’s Procuratorate, Wang Mou and others defrauded victim Xiao Mou of RMB 1.2 million under the pretense of purchasing USDT. Initially, investigative authorities submitted the case for prosecution on suspicion of robbery; however, after review, procuratorial organs determined that Wang Mou and others had deliberately orchestrated a sham transaction with the intent of unlawful appropriation—meeting all statutory elements of fraud—and thus lawfully filed public prosecution.

During the trial, defense counsel argued that the defendants’ conduct should be classified as contract fraud instead. Crucially, the distinction between fraud and contract fraud directly affects sentencing outcomes. Prosecutors countered in court that the crime of contract fraud—established under China’s Criminal Law—is designed specifically to safeguard the order of the socialist market economy, and the “contracts” it covers must reflect genuine market transactions grounded in legitimate economic activity. Since virtual currency trading has been explicitly banned by Chinese authorities and constitutes illegal financial activity, it lacks any lawful basis as a market transaction—and therefore falls outside the scope of contract fraud.