Recently, the cryptocurrency community was shaken by a news story: a post-2000 university student, Yang Qichao, issued a meme coin BFF, with a buyer investing 50,000 USDT, only to have the liquidity drained 24 seconds later, ultimately redeeming only 21.6 USDT. He was sentenced to 4 years and 6 months in the first instance, and after the second hearing on May 20, 2024, the controversy remains unresolved. This case is worth digging into for both crypto players and blockchain developers for its underlying warnings!


Core of the case: From "flash harvesting" to judicial disputes

Operational methods
After the token was listed and liquidity added, within seconds of buyers entering, developers directly drained the liquidity, causing the token price to plummet to zero, which is a typical "flash harvesting" tactic.

Degree of loss
The initial investment of 50,000 USDT ultimately left only 21.6 USDT; this is not ordinary "exploitation" but rather a form of predatory harvesting that is almost "uprooting".

Focus of judicial dispute
The first-instance court convicted him of fraud, but during the second instance, the defense raised a point of contention: "The platform itself allows for liquidity withdrawal operations, the contract code is unique and has not been faked, and all participants are high-risk players." This controversy directly tore apart the legal boundary between "market risk" and "criminal fraud," elevating the case from community discussion to a question of criminal law definition.

The whole community is debating: Is this a market behavior of willing to gamble and accept the consequences, or a blatant robbery disguised as liquidity withdrawal?


Three major warnings for cryptocurrency participants

- "Platform rules allow" does not mean it is legal. As long as there is a subjective intent to defraud and it objectively causes significant losses to others, criminal law will still intervene and regulate.
- "On-chain verifiability" cannot exonerate criminal activities. Even if the contract address is unique and on-chain records are transparent, if there is intent to trap, it may still constitute fraud—the key lies in whether there is subjective malice and actual damage results.
- "Players bear their own risks" is not an excuse for exploitation. Even if the other party is an experienced player, it cannot justify malicious harvesting; criminal law protects the legitimate property of all market participants, and "risk-bearing" is certainly not a get-out-of-jail-free card.


How to identify high-risk projects that engage in "pool withdrawal to exploit"?

- Liquidity not locked or time-locked: Liquidity can be withdrawn at any time after being added; such projects are likely to collapse in an instant.
- Contract permissions not relinquished: Developers can freely mint tokens and modify transaction taxes, holding a "backdoor" that allows them to harvest at any time.
- Name-drifting: Similar to well-known projects or DAO names, but the contract code and holding addresses are obviously inconsistent, which is a form of scamming.
- Over-marketing with no substance: Promotional hype far exceeds mainstream projects, but team information, audit reports, and white papers are all empty talk, likely a short-term scheme to make a quick profit.
- Abnormal trading conditions: Initial trading volume concentrated at a certain node, seemingly controlled by large funds, with severe fluctuations in K-lines, typically indicative of a pump-and-dump scheme.


How to properly safeguard rights after stepping on a landmine?

- Retain complete evidence: Transaction hashes, K-line screenshots, contract snapshots, community announcements, chat records, etc., no detail should be overlooked.
- Utilize multiple legal channels for protection: Report to local public security, file complaints with trading platforms, and simultaneously establish evidence chains through legitimate third-party preservation and notarization.
- Rationally unite for rights protection: Avoid joining informal "rights protection groups" to prevent secondary exploitation; synchronize information and actions through official channels.
- Cooperate with investigations: If financial transactions or sources are in doubt, proactively explain the situation and cooperate with investigations to avoid unnecessary trouble.


Ultimately, with tightening regulations, the cryptocurrency space is no longer a "wild zone where one can make money easily." Whether retail investors or developers, compliance and self-discipline are the long-term solutions. The legal red line must not be crossed; no matter how sharp the "sickle," if one dares to challenge the bottom line of criminal law, the only one who will be harmed in the end is oneself.

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