The Shanghai First Intermediate People's Court concluded a case of fundraising fraud on a digital collection platform
PANews reported on August 17th that the Shanghai First Intermediate People's Court (hereinafter referred to as the Shanghai First Intermediate People's Court) recently concluded a second-instance criminal case involving digital collectibles. Defendants Wang and Liu, under the guise of operating a digital collectibles platform, issued digital collectibles whose underlying electronic images were generated by AI. They falsely advertised the collectibles' potential for appreciation and promised a "half-price" return with principal guaranteed. The court found Wang and Liu guilty of fundraising fraud. The court sentenced Wang to eight years and six months in prison and a fine of 550,000 yuan; Liu to seven years and two months in prison and a fine of 500,000 yuan. The tools used in the crime were confiscated, and the stolen money was returned to the victim. The court ordered further repayment of any remaining balance.
From October to December 2023, Wang and Liu registered a technology company in Shanghai, primarily operating a digital collectibles platform. During this period, Wang and Liu used platforms, WeChat groups, and other online media to publicly advertise and sell digital collectibles to the public. They purchased digital images generated using computer AI for 2,888 yuan from others and then "chained" them (that is, placed them on a private blockchain created by a third-party blockchain company), transforming the images into digital collectibles with high investment value.
Wang and Liu issued 7,888 to 16,888 digital collectibles involved in the case on a certain platform at prices ranging from 9.9 to 69.9 yuan. Furthermore, Wang and Liu distributed red envelopes in chat groups, fabricated false claims of their overseas locations, and created the illusion of substantial financial resources. They falsely advertised the value-added prospects of the digital collectibles involved, promising physical feedback, "half-price" principal protection, and a buyback guarantee. They lured victims into purchasing the platform's first-released collectibles and then trading them on the platform's secondary market. They set up platform activities such as "blind boxes," "synthesis," "airdrops," and "priority purchases" to attract more victims to invest. They manipulated the trading volume and price of collectibles on the platform's secondary market by buying and selling them themselves, creating the illusion of active trading. When victims were unable to trade their collectibles and requested a refund, they blocked them.
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