Legal Risk you should know when you invest in CHINESE BTC Stock

[Anunnaki]

In China, crowd-funding is absolutely illegal.
According to the latest Chinese Supreme Court's <Explanations of several problems related to the judgement of illegal fundraising>, if individuals or institutions accept deposits and investments from society under following conditions, then this activity is illegal fundraising or  disguised fundraising, which is a felony in the Kingdom of Heaven(China's ironic nickname):
1. The fundraising activity does not have ratification from proper government department .
2. The fundraiser openly advertises its fundraising activity through media, conference, SMS and internet etc.
3. The fundraiser promises depositors or investors currencies, goods, or shares in return periodically.
4. The fundraiser accepts deposits or investments from unspecified investors of the public(Chinese citizens).

The Supreme Court further explains that "if a company, which does not have government permit to issue stocks or bonds, issue virtual securities in order to absorb funding, then its fund-raising activity satisfies the first condition." This explanation complies with the condition of most BTC institutions.
If BTC companies are sued by anyone, especially the government, then the managers of the institutions will be sentenced to "illegal absorption of public funding crime" according to Article 176 of <Chinese Criminal Law> .
More importantly, most BTC stock issuers collected several million dollars from IPO, or more than 6 million Chinese yuan. If they are declared guilty in the Chinese court, they will be sentenced 3~10 years in jail and 500 thousand yuan fine according to Article 176．
Interestingly,  the Supreme Court states that "If illegal fund-raisers use the money they raise in normal business operation, they can be exempt from criminal punishment as long as they can return the fund to investors in time."
This is also the reason why BTC Garden return investors' fund at IPO Price right after being extorting.
Now the question is that it is you, the investor, who will face the final risk of an IPO-suspension. If you invest at a price higher than the IPO price, then the BTC company may repurchase your shares at the IPO price once they face legal risk. Technically, they will only protect themselves from criminal punishments rather than protect investors' interests.
This is only a risk disclosure of BTC Stock investment, which does not aim at any specific stock. If you like my post, please send some support to my wallet address. Thanks.











 

[kingcrimson]

Maybe BTCGarden's mistake was telling everyone they are in China. It may be better if people are not aware where the operation takes place.

[arnoldsz]

in China, nonfinancial companies can't even borrow money from each other, it's also illegal

[arnoldsz]

Maybe BTCGarden's mistake was telling everyone they are in China. It may be better if people are not aware where the operation takes place.

BTCGARDEN has a unique weakness: it also runs a btc-rmb exchange platform. Yianding asks people to buy btc in that platform and buy BTCGARDEN stock with these btc, which makes it look like that BTCGARDEN is gathering fiat money, it's very dangerous. And other companies don't have this problem

[Anunnaki]

Maybe BTCGarden's mistake was telling everyone they are in China. It may be better if people are not aware where the operation takes place.

BTCGARDEN has a unique weakness: it also runs a btc-rmb exchange platform. Yianding asks people to buy btc in that platform and buy BTCGARDEN stock with these btc, which makes it look like that BTCGARDEN is gathering fiat money, it's very dangerous. And other companies don't have this problem

Actually, it doesn't matter what BTCGARDEN gathering. Collecting fiat money or commodity goods (Bitcoin is still a goods rather than a currency in China) will be counted as disguised fund-raising according to the law.

[arnoldsz]

Maybe BTCGarden's mistake was telling everyone they are in China. It may be better if people are not aware where the operation takes place.

BTCGARDEN has a unique weakness: it also runs a btc-rmb exchange platform. Yianding asks people to buy btc in that platform and buy BTCGARDEN stock with these btc, which makes it look like that BTCGARDEN is gathering fiat money, it's very dangerous. And other companies don't have this problem

Actually, it doesn't matter what BTCGARDEN gathering. Collecting fiat money or commodity goods (Bitcoin is still a goods rather than a currency in China) will be counted as disguised fund-raising according to the law.

but in China, law is not as important as the willing of law enforcement department. if it is about fiat money, police is very interested to investigate, bitcoin or other goods are not so attactive, which makes it much more safe. anyway, China is not a country ruled by law, it's ruled by man

[Anunnaki]

Maybe BTCGarden's mistake was telling everyone they are in China. It may be better if people are not aware where the operation takes place.

BTCGARDEN has a unique weakness: it also runs a btc-rmb exchange platform. Yianding asks people to buy btc in that platform and buy BTCGARDEN stock with these btc, which makes it look like that BTCGARDEN is gathering fiat money, it's very dangerous. And other companies don't have this problem

Actually, it doesn't matter what BTCGARDEN gathering. Collecting fiat money or commodity goods (Bitcoin is still a goods rather than a currency in China) will be counted as disguised fund-raising according to the law.

but in China, law is not as important as the willing of law enforcement department. if it is about fiat money, police is very interested to investigate, bitcoin or other goods are not so attactive, which makes it much more safe. anyway, China is not a country ruled by law, it's ruled by man

You are right. Chinese law enforcement department may ignore bitcoin fundraising activity because they are not so attractive. However, once this kind of activity is reported by someone who declares that he suffers a loss from the illegal fund-raising, then Chinese law enforcement department will act immediately. As long as the government investigation starts, the manager of the Chinese BTC companies will soon repurchase the outstanding shares from investors at IPO price in order to be exempt from criminal charge.

[joele]

Maybe BTCGarden's mistake was telling everyone they are in China. It may be better if people are not aware where the operation takes place.

If they did not tell they're from China then they will be accused of hiding something or lying, and lying = scam.

[vlaoou321]

u are right

[_mr_e]

Isn't ASICMiner in China?

[Franktank]

Isn't ASICMiner in China?

They were fortunate enough to evade that (at least from what we know on the forums). Their IPO took place before all the hype/fervor came to Bitcoin. Kind of makes you wonder if this ends up giving AM the edge, with all other projects unable to crowdsource funds.

However, it also does mean potential difficulties should BitFountain decide to issue more shares. 

[_mr_e]

Isn't ASICMiner in China?

They were fortunate enough to evade that (at least from what we know on the forums). Their IPO took place before all the hype/fervor came to Bitcoin. Kind of makes you wonder if this ends up giving AM the edge, with all other projects unable to crowdsource funds.

However, it also does mean potential difficulties should BitFountain decide to issue more shares. 

But aren't they STILL in china??

[Franktank]

Isn't ASICMiner in China?

They were fortunate enough to evade that (at least from what we know on the forums). Their IPO took place before all the hype/fervor came to Bitcoin. Kind of makes you wonder if this ends up giving AM the edge, with all other projects unable to crowdsource funds.

However, it also does mean potential difficulties should BitFountain decide to issue more shares. 

But aren't they STILL in china??

Yes, Shenzhen I believe.

[arnoldsz]

You are right. Chinese law enforcement department may ignore bitcoin fundraising activity because they are not so attractive. However, once this kind of activity is reported by someone who declares that he suffers a loss from the illegal fund-raising, then Chinese law enforcement department will act immediately. As long as the government investigation starts, the manager of the Chinese BTC companies will soon repurchase the outstanding shares from investors at IPO price in order to be exempt from criminal charge.

i still don't think Chinese police will be interested in bitcoin case. there are dozens or hundreds of game coin stealing cases in China everyday, but little is done by the police, virtual money is not seriously taken in this country. companies like Asicminer and labcoin don't need to worry about it too much, they don't touch fiar money, and police pays no attention to them

[Anunnaki]

Isn't ASICMiner in China?

They were fortunate enough to evade that (at least from what we know on the forums). Their IPO took place before all the hype/fervor came to Bitcoin. Kind of makes you wonder if this ends up giving AM the edge, with all other projects unable to crowdsource funds.

However, it also does mean potential difficulties should BitFountain decide to issue more shares. 

But aren't they STILL in china??

Yes, Shenzhen I believe.

I will visit ASICMINER if available.

[Anunnaki]

You are right. Chinese law enforcement department may ignore bitcoin fundraising activity because they are not so attractive. However, once this kind of activity is reported by someone who declares that he suffers a loss from the illegal fund-raising, then Chinese law enforcement department will act immediately. As long as the government investigation starts, the manager of the Chinese BTC companies will soon repurchase the outstanding shares from investors at IPO price in order to be exempt from criminal charge.

i still don't think Chinese police will be interested in bitcoin case. there are dozens or hundreds of game coin stealing cases in China everyday, but little is done by the police, virtual money is not seriously taken in this country. companies like Asicminer and labcoin don't need to worry about it too much, they don't touch fiar money, and police pays no attention to them

Perhaps we don't need to guess what they think. That's a tricky question. 

[yuansuyi]

China's national television- CCTV(China Central Television),  has reported Bitcoin affirmatively twice this year.

I do not see any chance that bitcoin will be declared as illegal in short-mid term in China.

[stslimited]

China's national television- CCTV(China Central Television),  has reported Bitcoin affirmatively twice this year.

I do not see any chance that bitcoin will be declared as illegal in short-mid term in China.

except this has nothing to do with declaring bitcoin illegal

this is about prohibitions of unregistered capital formation, most countries have regulations regarding this, the penalties in China for ignoring these regulations can have criminal sanctions

[forensick]

Incorporate offshore, get nominee services and the risk is mostly eliminated. If anyone needs help, PMme

[btc123.com]

Thanks to the informtion.

Anunnaki is more farmiliar with Chinese Law even than native people.