| Recent years have witnessed various financial innovations created by the blossom of Internet technology,which have motivated tremendous productivity in all areas in society.The integration of internet and finance has generated a series of financial innovations such as third-party payment,Internet consumer credit,Internet funds,online crowd funding,peer-to-peer lending and virtual currency,etc.,which have all been embedded with every aspects of daily life like daily transactions,living expenses,family investment.However,those financial institutions are making progress while walking near the boundary of criminal law,thus leads to problems of criminalization in many kinds of financial plans.Neither criminal theory nor judicial practice has carried intensive research on this issue,so this paper is dedicated to discuss related subjects concerning both criminal and civil matters by analyzing inner patterns of different types of internet financial instruments on the basis of a thorough study of numerous cases happening in recent years.Chapter one focuses on the basic theory and legislation of fintech,discusses the necessity and boundary of the criminal law intervention to the fintech area.It is the character of decentralization,flat organization,real time connection that sparks a variety of changes and innovations in internet finance.As a newly emerging financial model,internet finance is mainly relying on online tools like cloud computing,big data sourcing,social network and search engines to achieve financial intermediation,payment and intermediary business.But it is still facing absence or lagging in legislation as well as harshness of regulatory system,which brought a lot of internet financial crimes.Therefore it's particularly urgent and necessary to clarify the boundaries between innovation and crimes.At present,regulatory authorities like State Council,Central Bank and Banking Regulatory Commission have promulgated numerous regulations on the subjects like non-financial institutions payment,peer to peer lending,etc.,but related criminal cases are still decided according to criminal law and judicial interpretation,such as illegal fund-raising,fund-raising fraud as well as theft,embezzlement and other crimes.However,the criminal legislation and judicial ideas have not yet renewed in the releaxed policy background.The central bank and other ministries and commissions issued the guidance of promoting healthy development of fintech,which lays a legal foundation for fintech innovations from the macro perspective.However,the Criminal Law,the Securities Law and the judicial interpretation of illegal fund-raising investment still provides for the crime of illegal absorption of public deposits or unauthorized issue of shares,corporate bonds,which demonstrates that excessive criminal intervention in the fintech area will restrict its innovation.Therefore,the criminal law intervention to fintech innovation has its necessity,but need to give notice to its boundary.The author suggest that a)the administrative legislation be completed as soon as possible to improve the fintech regulatory system,b)the criminal law be revised to raise the standard of prosecution,even abolish the crime of illegal absorption of public deposits,c)the relevant crimes applied be restricted,in order to actively protect the policy-oriented fintech innovation.In this regard,we can learn from the western countries on the fintech legislation experience,that intensify the regulation of fintech from the aspects of subject qualification,information disclosure,financial security,privacy protection and so on.In addition,in the case overlapping criminal and civil law,we should establish a certain principle that the criminal law should be given the priority.The idea that criminal law is the last line of defense to protect the society does not apply to the judicial area.It is necessary to handle the relationship between civil procedure and criminal procedure with the standard that whether the objection of case is the same one.Chapter two discusses the legal risks and related legislation of both China and abroad on third-party payment and deliberates specific types of concerning crimes.Unauthorized business of third-party payment violates regulation of non-financial institution payment and shall be classified into crime of illegal business practice.How to define “violation of State regulations” is a debatable question.Generally speaking,we can't limited State regulations into laws legislated by the National People's Congress and its Standing Committee,or all the other rules and regulations made by the State Council,PBOC,CSRC or other authorities can't be applied.According to Measures for the Administration of Payment Services of Non-Financial Institutions issued by PBOC,a non-financial institution that intends to provide payment services shall obtain the Payment Service Permit.Without the approval of the PBOC,no non-financial institution or individual shall engage in,or in a disguised form,engage in any payment services.If it is suspected of committing a crime,the case shall be transferred to the public security authority for initiating a case for investigation and prosecution.If this kind of rules are not belong to “violation of State regulations” stipulated in Criminal Law,then “acts suspected of committing a crime” shall not be referred in the Measures.Because of the variety of the Internet finance crime,rules and regulations can clarify the conditions,rights and obligations of the subjects.If the breach of those rules and regulations would cause harms to the society,then it shall be punished by criminal laws,which doesn't breach the principle of legality and the principle of legal retention.Misappropriation of customers' excess reserve in third-party platform shall be judged as crime of misappropriation of funds or embezzlement depending on whether the crime is carried out by a company or an individual,whether for the purposes of illegal possession or temporary use.Neutral helping behavior of third party payment platform shall also be wholly reviewed on whether it constitutes a help crime by the standard of awareness of customers' crimes like money laundering,tax evasion and other crimes by using the platform.Theft of money in third party platform account shall be deemed as crime of theft other than fraud even though fraudulent means are adopted,because the money is not handed over on the owner's discretion.Chapter three introduces the recent development,basic characteristics and Chinese and foreign legislation of internet consumer credit,then makes an intense analysis on those criminal offenses involved.Compared with traditional consumer credit,internet consumer credit has three distinctive characteristic: financial scene and product and service's internet-changed,financial procedure internet-changed,and risk control's intellectualization.The internet consumer credit has seamless connection with the third-party payment platform.Finance company could calculate data based on the user's consumer record,credit information,asset allocation,income situation and other information,and then review and decide different credit levels for different users.Once the user click the bottom and choose to use this kind of payment method,they at the same time finished the loan review,contract signature,loan issuance,payment making and all the other procedure.However,the simplification of the procedure can't change the nature of internet consumer credit as a loan.The credit issued doesn't equal to the user's own money,and it still need to be issued by the platform after the contract has been signed,in this situation,click the bottom.Furthermore,the money issued can only be used to make payment to the products or service purchased while can't be withdrawal or for other purpose.Currently,lots of E-Commerce platform,even the entity sales company,produced their own consumer credit products,like Mayi Huabei,and Jingdong Baitiao.Misrepresented use of other's internet consumer credit,which is often seen,however,is totally different from that of third party payment account for the nature of consumer credit lies in loan contract other than cash thus it shall be identified as crime of fraud but not theft,which is identical to the logic of judicial interpretation on crime of credit card fraud.Since the consumer credit company is also a kind of financial institution,when the loan amount obtained illegally is very big,then it shall be treated as the crime of loan fraud,not general crime of fraud.Since there's no illegal possession purpose,the act also can't be treated as the crime of obtaining loan with fraudulent means.Even though the internet consumer credit products has similar credit function as credit card,it's still not the ”credit card” in relevant statutes defining the crime of credit card fraud by NPC Standing Committee.Thus,the act of malicious overdraft of Mayi Huabei can't be treated as the crime of credit card fraud,but crime of defrauding loan.The business that provides services for those cashing out consumer credit may be treated as the accomplice of the crime of defrauding loan,or constitute crime of illegal business practices.In addition,fraudulent acts by the name of internet consumer credit shall also be clarified as defrauding the user or the credit company.Chapter four starts from the nature and basic models of internet fund and analyses three types of relevant crimes in the light of legislative experience of western countries.Except for the online sale of traditional fund and the sale of financial products from the bank,in the recent years,internet funds,like “Yu'e Bao”,broke the wall between investment and online payment via its “T+0” business model,combining the advantage of flexibility and profitability.However,it cannot change the basic structure and nature of fund,an entrusting contract signed by fund management,fund custodian,payment platform,investors and other parties.In other words,every time when the user of “Yu'e Bao” transferred its money into his or her account of “Yu'e Bao”,relevant amounts of fund shares have been purchased,and the money would be managed and used by the fund manager.On the contrary,when the users transferred the money back from the account of “Yu'e Bao” or made payment via “Yu'e Bao”,the fund shares have been redeemed.Based on the definition above,theft from internet fund account does not equal to theft from bank account because the money does not under the user's direct possession,but the fund manage company's.Considering the core part of the entire act is taking advantage of false identity to defraud the fund manager to hand over money voluntarily,it shall be classified into crime of fraud.Another type of crime deriving from those crimes discussed above is stealing money from internet fund account through credit card, which shall be decided as crime of credit card fraud or crime of fraud by the object of offenses based on the source of money.If the offender used the credit card to verify identification of the real user,the act shall be defined as general crime of fraud;if the offender used money or credit in the card,then both two crimes shall be punished.Internet fund used the money collected to invest on shares and bonds.If the money collected has been used to lend to others,the act may be treated as the crime of illegal absorbing public deposits.If the internet fund claims that the investor can earn money through continued growth of their subordinates or expansion of suckers pool like Ponzi scheme,the act may be treated as crime of organizing pyramid selling.Chapter five discusses the legal nature of internet crowdfunding from its basic forms.Crowdfunding includes equity-based crowdfunding,lending-based crowdfunding,reward-based crowdfunding and public welfare-based crowdfunding.Most of the lending-based crowdfunding are P2 P internet lending.The purpose and nature of public welfare-based crowdfunding are different from other crowdfunding.Thus,this chapter mainly discussed reward-based crowdfunding and equity-based crowdfunding.For many enterprises,at the beginning period,because of the lack of money,they are not able to develop new products or extend operation.Furthermore,it's hard for them to borrow money from banks,and the cost of private lending is very high,thus,many enterprises choose to use equity-based crowdfunding to raise fund.According to current law and judicial interpretation,this kind of crowdfunding is a typical kind of crime of illegally absorbing public deposits,while the approved qualification of the platform could exempt the act from illegality.The act of illegal absorbing public deposits is different from legal sale acts,like top-up with cash-back.Currently,there's lots of platform used crowdfunding as a disguise to operate illegal acts.Those crowdfunding usually doesn't have real business operation,and the reward promised is much bigger than the investment amount.Besides,there are other kinds of crowdfunding in the platform: product-based crowdfunding and project-based crowdfunding,which in nature are presell contracts,and usually won't be treated as the crime of illegally absorbing public deposits.For other kinds of crowdfunding,it's important to make it clear the reward is money or products and service.If the reward is money,than it may be treated as “repaying principal and interests”;if the reward is products or service,than it may be treated as presale;for those mixed with money and products,it depends on which is the main part.Chapter six discusses peer to peer internet lending.In recent years,the platform of P2 P has developed new business models and operation methods,which,however,has high legal risks.How to divide the question into criminal law part and civil law part,is an important question which can't be avoided.Lots of P2 P company can't attract long term or large amount money,thus,they choose to split the loan by term and amount.Traditional P2 P platform shall not participate in the loan relationship.If the borrower needs a long term loan,after obtaining the consent of the borrower,the platform will divide the borrowing subject into different units with different term.If the published units are different from those agreed by the borrower,then there'll be overlap in terms,which would raise additional money in a period of time.Also,if the borrower needs large amount of money while the platform can't find a lender who can lend such amount of money,the platform would split the loan amount into several small unite to publish.No matter splitting the term or the amount,the key to identify the act is whether the total amount of the units equals to the actual loan need and if not,how to deal with the amount.If the total amount is more than the actual amount the borrower needs,and the platform absorbed the money into its own pool and lend to others,then the splitting act may become a kind of crime of illegal absorbing public deposits.The P2 P platform is not qualified to operate financing assurance business.However,in practice,lots of platform provides illegal assurance business,including without limitation risk reserve fund,platform assurance and buying up risk.risk reserve fund means that when there's risk of breach,the platform would use the money in the reserve fund pool to indemnify the investors,but the real assurance.Actually,organization only can be registered to operate financing assurance business after obtaining the business certificate of financing assurance company. Some platform provide assurance of “assignment of debt with condition”,which in nature is a kind of financing assurance.If the platform does not have such certificate,it may be treated as the crime of illegal business operation.Other platforms may provide risk buying-up service.When the borrower can't pay the debt,a risk buyer would pay all the principal and interests.However,the risk buyer can't obtain right of subrogation to the borrower,thus,this kind of act is not a kind of credit assurance,and will not be treated as crime.Chapter seven discusses the basic theory and main character of internet virtual currency,like Bitcoin.Since PBOC has defined them as internet virtual products,they can also be protected by laws.The scope of protection by criminal law shall develop with the society.Nowadays,the value and variety of internet virtual property has increased,and lots of traditional property has become virtual property.Sometimes,when you know a person's payment account and password,you can actually take charge of the money in his or her account.Like traditional property,virtual property also can't be duplicated.The key of Bitcoin has two backup files,and the invasion of one file doesn't directly lead to the invasion of the property.The act of breaking into the system to steal the key of Bitcoin is only a method of theft,and shall be absorbed into the crime of theft.Since the regulation system for Bitcoin is imperfect and the technology of internet virtual property is very complex,it has often been used in illegal acts.Since the sale of Bitcoin could around the world,when the invest used foreign currency to buy Bitcoin via internet account within the boarder,and sells them for RMB,this kind of act may be treated as transfer the in-board foreign currency outside,and may commit criminal law liability.Furthermore,because of the special rules of Bitcoin,it may take lots of resource to obtain those Bitcoin.In practice,there're lots of people using their company's resource,like computer or electric power to obtain Bitcoins.If the company suffered a lot,then this kind of act may be treated as the crime of theft or encroachment. |
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