The legal pitfalls behind Tdogecoin: starting from a criminal case involving someone born after 2000

What is a “Stray Dog Coin”? How Risky Is It?

Stray Dog Coin, simply put, refers to virtual assets issued directly by individuals or institutions on overseas public chains, outside of mainstream cryptocurrencies like Bitcoin and Ethereum which have large market caps and high liquidity. Most Stray Dog Coins lack even basic whitepapers and are launched directly for trading.

These types of coins seem to have low barriers to entry and many opportunities, but in reality, they hide significant risks. A recent real case has shown us the potential legal red lines behind Stray Dog Coins.

A Story from May 2022

The protagonist of the case is Yang Moumou, a senior student at a university in Zhejiang (born in 2000), who is also quite familiar with crypto assets—a “player.”

The story begins like this: In May 2022, Yang Moumou noticed an overseas DAO organization called “Blockchain Future Force” (BFF) announcing an upcoming ICO, planning to issue tokens on May 2.

Moumou detected an opportunity. At 4:41:46 PM on May 2, he independently issued a Stray Dog Coin named BFF on an overseas public chain, with the same name as Blockchain Future Force. Just over ten minutes later, he added 300,000 BSC-USD and 630,000 BFF to the BFF project, creating a liquidity pool (commonly known as “injecting funds for market making”).

A critical moment occurred: at the very same second Yang Moumou added liquidity, a trader named Luo exchanged 50,000 BSC-USD for 85,316.72 BFF tokens instantly.

Even more astonishing, just 24 seconds later, Yang Moumou withdrew all liquidity from the BFF token, receiving a total of 353,488.115 BSC-USD and 508,069.878 BFF tokens. This operation caused the BFF price to collapse instantly; Luo, who bought 81,043 BFF with 50,000 BSC-USD, saw its market value plummet to just 21.6 BSC-USD—almost zero.

Subsequently, Luo confirmed Yang Moumou’s real identity through investigation and reported the case to the Nanyang Public Security Bureau on May 3, 2022, claiming he was defrauded of over 300,000 yuan. The Nanyang Public Security Bureau eventually arrested Yang Moumou in November 2022, charging him with fraud.

Judicial Determination: Fake Coins + Liquidity Scam = Fraud?

The Nanyang High-tech Zone People’s Procuratorate’s logic was: Yang Moumou issued a fake BFF coin with the same name as Blockchain Future Force, using 300,000 USDT as a “bait” to lure Luo into investing 50,000 USDT, then quickly withdrew funds, ultimately defrauding Luo of 330,000 yuan. Prosecutors believed this constituted fraud.

On the surface, this seems to fit the “fraud” criteria. According to Article 266 of the Criminal Law, the elements of fraud include:

• The suspect has the intent to illegally possess others’ property
• Objectively, the suspect commits “fraudulent” acts (fictitious facts or concealment of the truth)
• The victim is misled, disposes of their property, and suffers losses

The Other Side of the Revealed Details

However, deeper analysis reveals issues. Luo’s transaction was completed in the same second Yang Moumou added liquidity. Normally, even the fastest human reaction cannot complete a purchase and confirm a transaction within one second—unless this is not human operation.

Analysis from third-party crypto insiders of Luo’s transaction records shows that Luo has extensive investments in Stray Dog Coins, with many trades completed within seconds to a dozen seconds for arbitrage, operating very professionally. This suggests Luo is likely a professional “trader” or “sniper” in the crypto space, using automated trading programs.

In other words, Luo did not fall into some “misunderstanding” because of Yang Moumou’s actions. He was engaged in high-frequency arbitrage, just “countered” by the market. In this case, the core element of fraud—the “victim being misled”—raises clear factual doubts.

The True Legal Risks of Stray Dog Coins

It should be clarified: although whether Yang Moumou committed fraud is debatable, issuing Stray Dog Coins is definitely not a legal gray area.

Issuing Stray Dog Coins could very likely constitute the following crimes:

Illegal Business Operation: Issuing virtual currencies without permission may be deemed illegal business activity.

Illegal Fundraising Crimes: Especially illegal public deposit absorption. Even if issued overseas, as long as the project team or operation team is domestic, under current policies announced on 9.4 and notified on 9.24, ICO activities could still be considered illegal fundraising.

Gambling-Related Crimes: Certain operations of Stray Dog Coins (such as lottery mechanisms, probabilistic dividends, etc.) may constitute organized gambling.

Risk Reminder for Participants

Although the crypto market is decentralized, legal regulation is inevitable. Issuing Stray Dog Coins may seem simple but is fraught with traps. From this case, regardless of how Yang Moumou is ultimately judged, he is already facing criminal prosecution due to this “operation.”

For ordinary participants, it is crucial to recognize: behind high returns of Stray Dog Coins often lie high risks and high illegality. Without sufficient legal awareness, reckless participation could turn you into a defendant rather than a victim.