Yescoin Founder Faces Criminal Charges; Web3 Entrepreneurs Need Compliance to Mitigate Risks

The recent dispute between the "Yescoin founders," Zhang and Wang, has attracted widespread attention. The commercial dispute has escalated into a criminal case. Some people attribute this to "mysterious forces," while others believe that Zhang, who has become a criminal suspect, deserves his fate. As a Web3 criminal lawyer, without being commissioned by the parties involved, Lawyer Liu is unable to access the case files related to Zhang's alleged crime of "illegally obtaining data from computer information systems." However, based on his understanding of Web3 entrepreneurs and his experience handling criminal cases, he would like to discuss the compliance issues that Web3 entrepreneurs should be aware of.

According to information disclosed by platforms such as Wu's Crypto and Odaily News, we can understand that the Yescoin platform, which operates small games on the Ton ecosystem, was involved in a commercial dispute between partners Wang and Zhang (also known as Zhang Chi in the aforementioned screenshot announcement). On February 12, 2025, Zhang was arrested by the police in Hangzhou on suspicion of the crime of "illegally obtaining data from computer information systems." Of course, Wang's side does not recognize Zhang's status as a partner.

On February 13, Zhang was taken to Shanghai by the police. The statement in Odaily's article that "he was sent to Shanghai for trial on February 13" is somewhat inaccurate. In criminal cases, it is impossible for a suspect to be immediately put on trial after being arrested. Instead, the case must go through the investigation by the public security organs, the review and prosecution by the procuratorate, and then the trial by the court. The typical cycle of a criminal case is at least six months or more before it enters the court trial stage. According to Lawyer Liu's experience, it is likely that the Shanghai police carried out the arrest in Hangzhou, with the local Hangzhou police cooperating according to the law. The suspect was then taken back to Shanghai by the Shanghai police. If Zhang cannot be released on bail, he should currently be detained in a detention center in one of the districts of Shanghai.

According to Wu's Crypto's "Exclusive Interview with Both Yescoin Teams: Unclear Equity Leads to Bad Consequences, Fierce Struggle over Control" and Odaily's "In-Depth Investigation of the 'Yescoin Founder' Arrest: Internal Struggle, Hard Fork, and Idealism," Zhang's team has always believed that their position or role is at the partner level. However, Wang believes that Zhang is not a project partner but rather someone who has been using his control over community resources to demand excessively high prices. After negotiations between the two parties failed, Zhang's Hangzhou team removed the data account permissions of the software owner, Old Wang, in November 2024, which may have led to the case.

According to Odaily, Zhang is currently suspected of the crime of "illegally obtaining data from computer information systems."

This crime is stipulated in Article 285, Paragraph 2 of the Chinese Criminal Law, mainly regulating the act of "violating national regulations, intruding into computer information systems other than those specified in the preceding paragraph (i.e., those related to state affairs, national defense, and cutting-edge scientific and technological fields), or using other technical means to obtain data stored, processed, or transmitted in such computer information systems, or to exercise illegal control over these systems." The crime is considered severe if the circumstances are serious.

There are two levels of punishment for this crime:

• For serious circumstances, the offender may be sentenced to fixed-term imprisonment of not more than three years or criminal detention, with or without a fine.

• For particularly serious circumstances, the offender may be sentenced to fixed-term imprisonment of not less than three years but not more than seven years, with a fine.

What are the standards for "serious" and "particularly serious" circumstances? According to current judicial interpretations, the standards for "serious" circumstances are:

1. Obtaining more than ten sets of identity authentication information for online financial services such as payment settlement, securities trading, and futures trading.

2. Obtaining more than five hundred sets of identity authentication information other than those mentioned in (1).

3. Illegal gains exceeding 5,000 yuan or causing economic losses of more than 10,000 yuan.

4. Other circumstances deemed serious.

The standards for "particularly serious" circumstances are behaviors or consequences five times or more severe than the above standards.

It is currently unknown which specific regulation Zhang violated to be charged, but based on Lawyer Liu's practical experience, the third item is the most likely.

Setting aside the dispute between Zhang and Wang of the Yescoin platform, we have seen too many partnership disputes escalate into criminal cases in practice, where "friends turn into enemies." The main reason is consistent with the Yescoin platform: the lack of prior equity arrangements among partners, shareholders, core employees, and even ordinary employees. In the early stages of entrepreneurship, it may be fine for everyone to work together based on friendship, but once profits—especially substantial profits—emerge, people's intentions often change, and everyone wants a larger share.

In fact, the common cases we see where shareholders "treat each other with criminal charges" are "embezzlement" and "tax-related crimes." These are absolutely the most commonly used weapons in business warfare. Although relevant departments have always emphasized that criminal means should not be used to intervene in commercial disputes, reality is what it is. With the increasing number of Web3 companies, some computer-related crimes have also begun to appear in shareholder disputes, which can be considered a new discovery of criminal risks in Web3.

Therefore, young Web3 entrepreneurs must focus on compliance from the outset. No legal documents should be omitted, and it is not advisable to download them from Baidu or Google. It is best to have them drafted or reviewed by professional lawyers to eliminate commercial and criminal legal risks as much as possible before and during the startup phase.

As Web3 lawyers, we strongly recommend that every entrepreneur have their own consulting lawyer, especially one who understands criminal defense in Web3. This is not just a lawyer's attempt to "sell themselves" to earn legal fees. It is mainly because we have witnessed too many legal risks in reality, including many criminal legal risks that could have been avoided in their early stages, and even could have led to a win-win situation. However, due to the lack of reliable lawyer participation and intervention, the situation often deteriorates into a lose-lose outcome, which is truly regrettable.

Yescoin Founder Faces Criminal Charges; Web3 Entrepreneurs Need Compliance to Mitigate Risks

The recent dispute between the "Yescoin founders," Zhang and Wang, has attracted widespread attention. The commercial dispute has escalated into a criminal case. Some people attribute this to "mysterious forces," while others believe that Zhang, who has become a criminal suspect, deserves his fate. As a Web3 criminal lawyer, without being commissioned by the parties involved, Lawyer Liu is unable to access the case files related to Zhang's alleged crime of "illegally obtaining data from computer information systems." However, based on his understanding of Web3 entrepreneurs and his experience handling criminal cases, he would like to discuss the compliance issues that Web3 entrepreneurs should be aware of.

According to information disclosed by platforms such as Wu's Crypto and Odaily News, we can understand that the Yescoin platform, which operates small games on the Ton ecosystem, was involved in a commercial dispute between partners Wang and Zhang (also known as Zhang Chi in the aforementioned screenshot announcement). On February 12, 2025, Zhang was arrested by the police in Hangzhou on suspicion of the crime of "illegally obtaining data from computer information systems." Of course, Wang's side does not recognize Zhang's status as a partner.

On February 13, Zhang was taken to Shanghai by the police. The statement in Odaily's article that "he was sent to Shanghai for trial on February 13" is somewhat inaccurate. In criminal cases, it is impossible for a suspect to be immediately put on trial after being arrested. Instead, the case must go through the investigation by the public security organs, the review and prosecution by the procuratorate, and then the trial by the court. The typical cycle of a criminal case is at least six months or more before it enters the court trial stage. According to Lawyer Liu's experience, it is likely that the Shanghai police carried out the arrest in Hangzhou, with the local Hangzhou police cooperating according to the law. The suspect was then taken back to Shanghai by the Shanghai police. If Zhang cannot be released on bail, he should currently be detained in a detention center in one of the districts of Shanghai.

According to Wu's Crypto's "Exclusive Interview with Both Yescoin Teams: Unclear Equity Leads to Bad Consequences, Fierce Struggle over Control" and Odaily's "In-Depth Investigation of the 'Yescoin Founder' Arrest: Internal Struggle, Hard Fork, and Idealism," Zhang's team has always believed that their position or role is at the partner level. However, Wang believes that Zhang is not a project partner but rather someone who has been using his control over community resources to demand excessively high prices. After negotiations between the two parties failed, Zhang's Hangzhou team removed the data account permissions of the software owner, Old Wang, in November 2024, which may have led to the case.

According to Odaily, Zhang is currently suspected of the crime of "illegally obtaining data from computer information systems."

This crime is stipulated in Article 285, Paragraph 2 of the Chinese Criminal Law, mainly regulating the act of "violating national regulations, intruding into computer information systems other than those specified in the preceding paragraph (i.e., those related to state affairs, national defense, and cutting-edge scientific and technological fields), or using other technical means to obtain data stored, processed, or transmitted in such computer information systems, or to exercise illegal control over these systems." The crime is considered severe if the circumstances are serious.

There are two levels of punishment for this crime:

• For serious circumstances, the offender may be sentenced to fixed-term imprisonment of not more than three years or criminal detention, with or without a fine.

• For particularly serious circumstances, the offender may be sentenced to fixed-term imprisonment of not less than three years but not more than seven years, with a fine.

What are the standards for "serious" and "particularly serious" circumstances? According to current judicial interpretations, the standards for "serious" circumstances are:

1. Obtaining more than ten sets of identity authentication information for online financial services such as payment settlement, securities trading, and futures trading.

2. Obtaining more than five hundred sets of identity authentication information other than those mentioned in (1).

3. Illegal gains exceeding 5,000 yuan or causing economic losses of more than 10,000 yuan.

4. Other circumstances deemed serious.

The standards for "particularly serious" circumstances are behaviors or consequences five times or more severe than the above standards.

It is currently unknown which specific regulation Zhang violated to be charged, but based on Lawyer Liu's practical experience, the third item is the most likely.

Setting aside the dispute between Zhang and Wang of the Yescoin platform, we have seen too many partnership disputes escalate into criminal cases in practice, where "friends turn into enemies." The main reason is consistent with the Yescoin platform: the lack of prior equity arrangements among partners, shareholders, core employees, and even ordinary employees. In the early stages of entrepreneurship, it may be fine for everyone to work together based on friendship, but once profits—especially substantial profits—emerge, people's intentions often change, and everyone wants a larger share.

In fact, the common cases we see where shareholders "treat each other with criminal charges" are "embezzlement" and "tax-related crimes." These are absolutely the most commonly used weapons in business warfare. Although relevant departments have always emphasized that criminal means should not be used to intervene in commercial disputes, reality is what it is. With the increasing number of Web3 companies, some computer-related crimes have also begun to appear in shareholder disputes, which can be considered a new discovery of criminal risks in Web3.

Therefore, young Web3 entrepreneurs must focus on compliance from the outset. No legal documents should be omitted, and it is not advisable to download them from Baidu or Google. It is best to have them drafted or reviewed by professional lawyers to eliminate commercial and criminal legal risks as much as possible before and during the startup phase.

As Web3 lawyers, we strongly recommend that every entrepreneur have their own consulting lawyer, especially one who understands criminal defense in Web3. This is not just a lawyer's attempt to "sell themselves" to earn legal fees. It is mainly because we have witnessed too many legal risks in reality, including many criminal legal risks that could have been avoided in their early stages, and even could have led to a win-win situation. However, due to the lack of reliable lawyer participation and intervention, the situation often deteriorates into a lose-lose outcome, which is truly regrettable.