Legal Debate on Embezzlement in Web3: Why Crypto Industry Workers Should Not Be Criminalized

Jinse

Release Time:12/20/2025 12:01:46

On October 27, 2025, Pan Gongsheng, Governor of the People's Bank of China, reaffirmed at the Financial Street Forum that China's 2017 policies to regulate virtual currency trading remain active. While the crackdown on illegal crypto activities continues, a growing legal debate is emerging. Chinese courts are increasingly applying embezzlement laws to offshore Web3 projects, despite their status as unregulated or banned under local law. Critics argue this contradicts national financial policy and the spirit of the EU Markets in Crypto-Assets Regulation, which prioritizes clear legal boundaries. As risk-on assets remain volatile, the line between protecting investors and overreaching into illegal sectors is growing thinner.

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