According to BlockBeats, on August 17, the Shanghai No. 1 Intermediate People's Court (Shanghai No. 1 Intermediate People's Court) official account disclosed that the court recently concluded a second-instance criminal case involving digital collections. The defendants, Wang and Liu, issued digital collections whose underlying electronic images were generated by AI under the guise of operating a digital collection platform. They falsely advertised the appreciation prospects of the aforementioned digital collections and promised "half-price" principal preservation. The court ruled that Wang and Liu constituted the crime of fundraising fraud and sentenced them to eight years and six months and seven years and two months in prison, respectively.
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. Wang and Liu offered 7,888 to 16,888 units of the digital collectibles involved in the case on the platform at prices ranging from 9.9 to 69.9 yuan. By engaging in self-purchase and self-selling, they manipulated the secondary market trading volume and prices on the platform, creating the illusion of active trading. When victims were unable to trade their collectibles and requested a refund, they blocked their accounts.
After trial, the Shanghai No. 1 Intermediate People's Court held that the technology company involved in the case primarily operated a digital collectibles platform without obtaining the corresponding administrative license. The digital collectibles involved lacked support from cultural and artistic activities, and their sale prices significantly deviated from their value, violating market principles. The "on-chain services" provided by the platform were also not of appreciable value. Wang and Liu's actions were not essentially the sale of goods, but rather a scheme to defraud victims of their investment funds under the guise of operating a digital collectibles platform. Their actions were illegal, public, lucrative, and socially motivated, and should be considered illegal fundraising. Furthermore, Wang and Liu used fraudulent methods to raise a substantial amount of funds for the purpose of illegal possession, constituting the crime of fundraising fraud.