Author: Lawyer Mankun

Introduction: The risks of cryptocurrency cases are increasingly exposed during the "relief stage."

When dealing with cryptocurrency cases, you will repeatedly encounter a very typical emotional response from clients:

"I know I’ve been scammed, the money has indeed been transferred, and it can be seen on the blockchain. Why is no one taking action, and why can’t I get it back?"

The problem often lies not in the facts but in the procedural aspects—

The clearer the facts, the more likely clients mistakenly believe that "relief can be initiated"; however, in cryptocurrency cases, whether relief can be initiated depends on three things: qualification, jurisdiction, and whether evidence can be substantiated.

In recent years, the forms of cryptocurrency disputes have also changed:

In the early days, they were more about "theft and running away"; now they often involve structures that appear quite legitimate (listing services, U-commerce exchanges, NFT investment platforms), but the asset paths are more complex, the subjects are more dispersed, and cross-border issues are more common. Thus, when cases progress to the "relief stage," they often encounter three barriers:

• Assets have value, but their nature and trading relationships are not easily classified quickly: Are they considered property, contractual objects, investment rights, or tools in a criminal chain?;

• Cross-border and multi-subject structures make jurisdiction and evidence collection real challenges: the blockchain is here, the exchange is there, the server is overseas, and the person has run away?;

• Civil and criminal matters are interlinked: Once deemed "potentially criminal," civil matters can easily be stalled or even transferred, and the pace of relief is completely out of the client's control.

Below, I will clarify "why it gets stuck" and "what lawyers can do" using three typical cases.

Real Case Review

Case 1: Cross-border "Listing Service Fee" Scam

A company from Country H planned to list a token on an exchange in Country S and connected with a Chinese salesperson from the exchange. Both parties agreed to pay 800,000 USDT as a listing service fee.

After the payment was completed, the salesperson went missing, and the exchange stated that he had resigned, and the service fee had not been received.

Key Obstacles in Case Progression

• The case involves obvious cross-border factors, making civil relief difficult to initiate directly; the principle of prioritizing criminal matters requires first resolving whether a case can be filed.

• The cross-border nature of cryptocurrency assets complicates evidence collection and judicial jurisdiction, for example, wallet transaction records are distributed across different blockchains, and the exchange's server is located overseas.

• There are differences in the classification of the nature of the actions: Is it criminal fraud or civil breach of contract? This directly determines which procedure the case enters and whether relief can be initiated.

What Can Lawyers Do?

First, don’t rush to write about "how I was scammed," first map out "how the money was transferred": transfer chain, wallet addresses, timeline, identity materials of the other party, communication records, feedback from the exchange.

Simultaneously prepare two sets of talking points:

For criminal: Highlight local/person jurisdiction hooks, emphasize key facts of "with the intent of illegal possession" (inducement, fictitious identity/authority, service commitments, refusal to perform, going missing, etc.).

For civil: Compress the dispute into "service fee payment—service not performed—no basis for the other party's possession," to lay the groundwork for subsequent negotiations/property preservation.

Don’t treat "exchange responses" as conclusions; treat them as evidence entry points: It’s common for exchanges to deny responsibility, but lawyers should turn it into a source of clues about "the other party's internal management, authority, and business relationships."

Case 2: USDT Exchange Scam

An investor met an "investment advisor" online, who recommended exchanging USDT through U-commerce. The investor transferred over 3 million yuan to multiple accounts, but the funds never arrived. Subsequently, the U-commerce was arrested, but it only provided exchange services and had no direct connection to the upstream scam group, leading the police to ultimately terminate the investigation.

Key Obstacles in Case Progression

First, conduct a "recoverability assessment" before discussing paths. This assessment is harsh but necessary: Which accounts can still be frozen? Which subjects can be located? Which evidence can close the loop?

Break down the "fund flow" into two lines running simultaneously:

• Bank side: transfer chain, identity of the receiving account, fund destination (is it concentrated, is it dispersed in the short term).

• Blockchain side: Are there aggregations, collections, cross-chain movements, or entry points into exchanges related to known wallets?

The core variable in such cases often lies not in "whether a lawsuit can be filed," but in "whether asset control can be achieved at key nodes." We will explain the feasibility and risks of each node to the client during the process, allowing decisions to be based on executable foundations.

Case 3: NFT Investment Scam

A client purchased a series of high-value NFTs through an online platform, which claimed that the related NFTs could yield future art dividends and scarce digital rights. After the client paid approximately 5 million yuan, the platform suddenly shut down, the website became inaccessible, and the person in charge went missing. Subsequent investigations revealed that the NFT smart contract code had backdoors, allowing assets to be transferred at will.

Key Obstacles in Case Progression

• NFTs, as digital assets with derivative rights, possess both investment and trading attributes, and their legal classification remains highly uncertain under existing rules.

• The platform's subject and smart contracts are highly anonymized, compounded by cross-border deployment, leading to real obstacles in asset tracking, subject identification, and judicial jurisdiction.

• Even if technical tracking can be done through contract logs, blockchain records, or IP information, cross-chain assets often involve multiple judicial jurisdictions, making actual recovery extremely difficult.

Expanding Practical Perspectives

Translate technical facts into language that the judiciary can understand: A contract backdoor means control is not in the client's hands; "can be transferred at will" corresponds to a key factual pivot of "intent of illegal possession."

Don’t focus only on blockchain evidence: Bank statements, recharge records, platform promotional commitments, dividend mechanisms, chat records, contract terms, backend screenshots—these often resonate more with the authorities than "blockchain analysis reports."

Also, clarify the probability of recovery in advance: Contract backdoor + cross-chain + anonymous structure essentially maximizes the difficulty of asset recovery; criminal proceedings may not necessarily "bring it back," but at least can strive to control key nodes.

Core Reasons for Obstacles in Civil Relief

Looking back at the three cases mentioned, it can be seen that although the types of cases differ, they all encounter highly similar institutional obstacles in the civil path once they enter the relief stage.

1. Criminal Priority Principle

• Actions involving criminal offenses must first be investigated; civil litigation usually has to wait for the criminal procedure to be completed.

• Once a criminal judgment deals with property rights, civil re-litigation will trigger "res judicata."

• If a civil case is to be transferred to the police, and the court determines that the actions are suspected of being criminal, the civil path is forcibly interrupted.

2. Difficulty in Cross-border Accountability

• The funds involved and suspects are distributed across multiple countries, making cross-border evidence collection, investigation, and enforcement highly restricted.

• Anonymity and programmability allow assets to be split and transferred in a short time, further weakening the possibility of recovery.

3. Complexity in Asset Identification and Action Classification

• Cryptocurrency assets can be payment tools or carry investment or derivative rights; differences in classification directly affect the relief path.

• Even if entering civil procedures, due to asset dispersion, insufficient evidence, or unclear legal applicability, courts often find it difficult to support return requests.

Practical Insights

Civil relief limitations are not just procedural issues but also institutional constraints.

In cryptocurrency cases, the criminal path remains the most realistic and feasible means of relief, and the lawyer's core role is to help clients reasonably plan their paths and avoid consuming the only relief space in procedural choices.

Insights for Lawyers: Don’t just "pile up materials," but control the "path."

Combining the issues exposed at different stages in the three cases mentioned, the core capabilities of lawyers in cryptocurrency cases can be summarized into three levels: front-end risk identification, evidence and structure control during the process, and a clear understanding of institutional boundaries.

(1) Front-end: Identify risks in advance, rather than remedying them afterward

• Judgment of transaction legality: Analyze whether it touches on illegal fundraising, fraud, or illegal business risks, focusing on whether the tokens have characteristics of securities.

• Distinction of asset attributes: Payment-type or functional tokens are more easily included in the "circulating property" framework; tokens with profit promises are more likely to trigger criminal involvement.

• Cross-border structure prediction: Whether it involves foreign subjects, exchanges, or wallet addresses directly determines the difficulty of subsequent accountability.

(2) Process: Build an evidence chain that can be accepted by the judiciary

• Standardize contracts and transaction records: Clarify transaction purposes and rights and obligations, systematically preserve on-chain flows and operation records.

• Retain cross-border communication evidence: Bank statements, platform emails, chat records, etc., need to pay attention to formation time and continuity.

(3) Understanding institutional boundaries: Path selection itself is a strategy

• Most cryptocurrency cases cannot bypass criminal procedures and should prioritize assessing the feasibility of criminal paths.

• Civil litigation serves more as a tool for negotiation and fund recovery rather than a primary reliance.

• Lawyers need to clearly manage client expectations, avoiding the misunderstanding that "the existence of a procedure" equates to "inevitable results."

(4) Advanced Practice: Moving towards "Critical Judgments"

Many cases may still get stuck even if you prepare the materials to perfection. The reason usually lies not in the level of effort but in several "critical judgments":

• How the nature of the actions is understood (fraud vs. dispute; organizer vs. intermediary; beneficiary vs. tool person);

• Whether the risk structure can be identified in advance (profit promises, aggregation nodes, exchange entry, evidence of control);

• Whether the window period has been seized (freezing nodes, cooperation nodes, subject locking nodes).

These judgments are not written in the law but determine the direction of the case.

From "what can be done" to "when it can be accomplished": turning key judgments into reusable methods

Returning to the three cases mentioned earlier, a commonality can be found: Many cryptocurrency cases do not lack "rules," but rather there are gaps between the rules—qualification, jurisdiction, evidence, asset control nodes, each of which can halt case progression.

A more realistic point is:

Even if lawyers prepare the materials thoroughly, the case may still get stuck at a certain node—not due to capability issues, but because they encounter several types of "critical judgments":

• Is this fraud or a trading dispute?

• Can the responsible party be locked down?

• Is the asset control window still open?

These judgments are difficult to clarify with "one-liner experience" and hard to derive directly from a few legal provisions. They resemble a kind of "craft" in case handling: the same facts can be framed as a structure that can be filed by some, while others can only frame it as a "suspected dispute." The difference often lies in how evidence is organized, how paths are ordered, and how nodes are accurately navigated.

Thus, the closed-door seminar/practical training we arranged in Zhengzhou this year aims not to "repeat the concepts," but to break down these judgments into working methods that lawyers can directly apply:

• Focus on the nodes that are most easily misjudged and most affect the outcome: when to prioritize criminal matters, when to seek preservation, when to use civil as an auxiliary tool, and when to adjust strategies.

• Systematically deconstruct the organization of criminal entry points, jurisdiction hooks, asset control nodes, and evidence closure.

We aim to clarify the basic logic of the industry and trading system while creating a reusable framework for the high-risk structures, applicable charges and defenses, and key node methodologies in cryptocurrency cases. The goal is simple—allowing you to return to practice, capable of handling consultations and more steadily managing cryptocurrency criminal cases.

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