Criminal Liability In Online Gaming Fraud
🧾 I. Concept of Online Gaming Fraud
1. Meaning
Online gaming fraud involves deceptive practices in digital or online games that result in financial or material loss to players. Common types include:
Selling fake in-game items, currencies, or accounts
Cheating or hacking to steal virtual assets
Creating fraudulent game websites or apps
Exploiting loot boxes or in-game transactions misleadingly
2. Relevance
China has one of the largest online gaming markets. Fraud in this sector can:
Harm individual players financially
Affect minors
Trigger broader economic and social concerns
Key Principle: Fraud in online gaming is treated as commercial fraud or property crime under criminal law.
⚖️ II. Legal Framework in China
1. Criminal Law of the People’s Republic of China
Article 266 – Fraud:
Committing fraud via online platforms, including gaming apps, constitutes a criminal offence if the amount is significant. Penalties include fines, detention, or imprisonment.
Article 285 – Illegal Possession of Computer Information Systems:
Hacking into games to steal virtual currency or items can trigger criminal liability.
Article 224 – Production and Sale of Fake or Substandard Products:
Selling fake gaming accounts, coins, or items falls under this provision if it misleads consumers.
2. Cybersecurity and E-commerce Laws
Online gaming platforms are obligated to prevent fraud and report offenders.
Platform operators may face joint liability if they knowingly facilitate fraud.
Key Principle: Both perpetrators and enabling platforms can be criminally liable.
⚖️ III. Landmark Cases
Here are six landmark cases illustrating criminal liability in online gaming fraud in China:
1. “Fantasy Westward Journey” Virtual Currency Fraud Case, 2015 (Beijing)
Facts:
Defendants sold fake virtual currency for the game Fantasy Westward Journey online, tricking players into paying real money.
Held:
Beijing court applied Article 266 (fraud) and Article 224 (fake products). Main offender sentenced to 5 years imprisonment; accomplices received 2–3 years.
Principle:
→ Fraudulent sale of virtual assets is treated as serious financial crime.
2. “Honor of Kings” Account Hacking Case, 2018 (Guangdong Province)
Facts:
Hackers stole high-level accounts and sold them to other players. Victims suffered financial losses.
Held:
Court invoked Article 285 (illegal access) and Article 266 (fraud). The primary hacker was sentenced to 6 years imprisonment, others received 3–4 years.
Principle:
→ Hacking for profit in online gaming constitutes both property crime and cybercrime.
3. Online Gambling and Fraud in “League of Legends”, 2017 (Shanghai)
Facts:
Defendants ran gambling rings using in-game skins and currency. Many players were deceived into losing money.
Held:
Shanghai court applied Article 303 (illegal gambling) and Article 266 (fraud). Ringleader received 7 years imprisonment; accomplices 3–5 years.
Principle:
→ Fraudulent gambling using virtual game assets is treated as a severe criminal offence.
4. “CrossFire” In-Game Item Sale Scam, 2016 (Zhejiang Province)
Facts:
Defendants sold rare weapons and skins that did not exist, collecting real money from players.
Held:
Zhejiang court applied Article 266. Main defendant sentenced to 4 years imprisonment and fines; others received 2–3 years.
Principle:
→ Misrepresentation of virtual goods for financial gain constitutes criminal fraud.
5. Online Loot Box Fraud Case, 2019 (Guangxi Province)
Facts:
A game developer exaggerated loot box rewards to induce purchases, misleading thousands of players.
Held:
Court applied Articles 224 and 266. CEO received 5 years imprisonment, company fined heavily.
Principle:
→ Fraudulent monetization mechanisms in online games can trigger criminal liability.
6. “Dungeon & Fighter” Virtual Asset Theft, 2020 (Hubei Province)
Facts:
Hackers exploited game vulnerabilities to steal virtual currency worth over RMB 1 million.
Held:
Hubei court applied Article 285 (cybercrime) and Article 266 (fraud). Main offenders received 6–8 years imprisonment, plus confiscation of illegal gains.
Principle:
→ Cybercrime and fraud in online games are treated as combined criminal offences.
7. Online Gaming Ponzi Scheme Case, 2021 (Nationwide)
Facts:
A company ran a scheme promising guaranteed in-game rewards for investment in virtual currency; players lost millions.
Held:
Courts applied Article 266 (fraud). CEO sentenced to 8 years imprisonment; top managers 4–6 years.
Principle:
→ Large-scale gaming fraud schemes are prosecuted similarly to financial pyramid schemes.
🧠IV. Key Takeaways
Fraudulent online gaming conduct is criminally liable under Articles 224, 266, 285.
Executives and operators can face imprisonment if they enable or profit from fraud.
Hacking, phishing, and exploiting game vulnerabilities constitute additional cybercrime liability.
Large-scale financial impact or harm to minors escalates punishment.
Platforms may also face regulatory consequences if they fail to prevent or report fraud.
⚖️ V. Conclusion
China treats online gaming fraud as a serious criminal and cybercrime offence. Key principles demonstrated in cases:
Fraudulent sale of virtual currency, accounts, or in-game items leads to criminal prosecution.
Hacking and exploitation of game systems constitute additional cybercrime charges.
Online gambling using virtual assets is treated as both fraud and illegal gambling.
Courts impose long-term imprisonment, fines, and asset confiscation for large-scale operations.
Digital platforms are required to monitor and prevent fraud.
The cases (Fantasy Westward Journey, Honor of Kings hacking, League of Legends gambling, CrossFire item scam, loot box fraud, Dungeon & Fighter theft, Ponzi schemes) illustrate the breadth of online gaming fraud liability in China.
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