Hangzhou Court Sentenced A Defendant To 3 Years In Prison For Stealing NFT
- The procuratorate of Gongshu District, Hangzhou City, Zhejiang Province, filed a public prosecution.
- The court accused the defendant Chen of three years imprisonment, suspended for four years and six years, for stealing NFT collections.
- NFT is still traded in China despite the crypto ban.
The Gongshu District Procuratorate of Hangzhou City, Zhejiang Province, filed a public prosecution a few days ago, according to the daily inspection report. The defendant Chen was sentenced to three years in jail, suspended for four years and six months, and fined 7,000 yuan by the court.
On July 20, 2022, Chen unintentionally uncovered a flaw in the login procedure of a specific digital collecting platform. After an inquiry, Chen successfully entered into the accounts of over 30 people and sold the non-fungible token (NFT) collections of 21 of them for a unit price ranging from 1,400 to 1,600 yuan, netting a profit of over 30,000 yuan.
Mr. Wang from Hangzhou is a player in the digital collection. Wang paid 299 yuan in July 2022 to acquire a digital collection on an internet site. Due to restricted sales, the value of this digital collection swiftly increased, and Wang was overjoyed.
When Wang returned to the platform in the early hours of July 22 of the same year, he discovered that the digital collection he had held had vanished. Account records reveal that the collection was resold to other users, although he did not undertake any activities himself.
Wang quickly reported the issue in the WeChat group of digital collecting users due to the incident’s fast occurrence. Surprisingly, more than ten individuals reported having had the same problem.
This heightened the network platform’s alertness, and platform experts promptly analyzed the server logs to see if there was any aberration in the database. The findings revealed that more than 30 user accounts were logged into the same IP address at the time, and 21 consumers’ digital collections were sequentially resold.
When the online platform learned of this unusual circumstance, it assumed that someone had covertly entered into the user’s account to execute criminal activities on the user’s digital collection. At that point, platform technicians performed a reverse check and discovered that the IP had also entered into an account whose genuine name was validated as Chen.
To learn more, the online platform checked the matter with the third-party platform that handled the resale, and the records revealed that the account registration information for the selling of 21 NFT collections matched Chen’s personal information. Chen was detained shortly after the network platform alerted the police. These 21 collections have now been restored to the original user account.
Because of Beijing’s restriction on cryptocurrencies, most NFTs in China are referred to as digital collectibles and can only be purchased using legal cash, often yuan. For years, the national government has consistently clamped down on blockchain-based assets, seeing crypto as a danger to financial stability.
According to SCMP, customer complaints against NFTs in China increased 300-fold in 2022, indicating an issue that is becoming more difficult to manage.
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