A Shanghai court in China has analyzed the determination of criminal liability in virtual currency-related "traffic diversion" telecom fraud cases, finding that the relevant acts may constitute an accomplice to fraud or the crime of illegal use of information networks.

The Shanghai Intermediate People's Court of China has released a typical judicial case, analyzing the determination of whether "referral personnel" in telecom and online fraud cases involving virtual currencies constitute accomplices to fraud. From February 2022 to April 2023, the defendants, seeking illicit profits, assisted upstream fraud crimes in referral activities—using virtual phone software to lure victims into joining fraud-related groups, ultimately leading to 30 victims being defrauded of a total of over 2.34 million RMB by an overseas fraud organization (currency unit same hereinafter). The overseas fraud organization transferred the funds to the suspects' trading accounts via virtual currencies. The three defendants in this case were convicted of fraud and sentenced to fixed-term imprisonment ranging from 10 to 13 years. The Shanghai No.1 Intermediate People's Court noted that in telecom and online fraud cases, "referral personnel" may, depending on the circumstances, be convicted as accomplices to fraud or the crime of illegal use of information networks. The key lies in determining whether they have formed clear criminal intent communication with the upstream fraud syndicate and whether there is a stable division of labor and collaboration. When determining the criminal liability of "referral personnel" in judicial practice, factors such as their role in the criminal chain, level of organizational management, connections with upstream criminals, profit-making methods, and abnormal behavioral manifestations should be comprehensively considered. A distinction must be made between acts that only provide general network services without forming a fraud conspiracy, and "referral" acts that knowingly participate in the implementation of fraud.