#中国加密新规 Duyun Innovation! New Solution for the Preservation of Involved Virtual Currency

In the wave of digitalization, the criminal issues arising from virtual currency transactions are becoming increasingly prominent, and the preservation challenges of involved virtual currency are troubling law enforcement agencies across the country. After China strictly prohibited virtual currency transactions in 2021, this issue has become even more complicated. Recently, Duyun City in Guizhou Province has provided an innovative 'solution' that offers valuable insights for the whole country.

During investigations, Duyun police discovered that some criminal suspects were converting their illegally obtained funds into virtual currency in an attempt to evade legal sanctions. In response to this situation, Duyun police actively explored and innovatively adopted a method of seizing the frozen involved virtual currency and transferring it to a cold wallet, achieving physical isolation. The cold wallet essentially is an offline storage of cryptocurrency private keys, like a 'safe' that is isolated from the internet, effectively avoiding hacker attacks and online fraud, greatly enhancing the security of virtual currency storage.

In terms of specific operations, Duyun police first legally froze the involved virtual currency addresses through technical means, then transferred them to dedicated hardware cold wallet devices for safe keeping. The seized cold wallets are stored in the safe of the Duyun City Involved Property Co-Management Center, completely physically isolated from the internet, maximizing asset security. Furthermore, to further strengthen security management, the cold wallet adopts a 'cold wallet + separate management' model, splitting the 12-digit 'mnemonic phrase' (English words) of the cold wallet into two groups, each managed by different individuals. They only connect to the internet briefly when access is needed, while normally being stored in a physically isolated manner.

Duyun City has also established the province's first 'Public Security, Prosecutorial, and Judicial' Co-Management Center for involved property, covering a total area of 8,848 square meters, including multiple functional areas such as property management storage, vehicle storage, and archives, capable of accommodating over 100,000 items and more than 200 vehicles. The center employs a 'hardware + system + intelligence' integrated model, installing 132 surveillance cameras, 4 infrared alarm systems, 6 electronic pulse intrusion prevention fences, and utilizing advanced technologies such as IoT EAS radio frequency anti-theft systems, RFID radio frequency tags, and infrared detection to achieve full-process closed-loop management of involved property.