What is the CSW case (CSI classic case)?

08/10/2023 11:00 • Tech Ticker • 109 views

What is the CSW case? According to the financial report of Hexun, the CSW case is being publicly heard in the Chaoyang Court in Beijing

According to the Cybercrime Law, platforms that register and conduct transactions online are considered unauthorized illegal financial businesses, with the purpose of evading legal pursuit and regulation. Therefore, restricting transfers or freezing accounts of users is considered illegal behavior. However, it is currently still “unauthorized” and cannot use third-party identity verification. In addition, due to the involvement of computer code vulnerabilities and cryptocurrency theft in this case, it should not be regarded as a criminal prosecution, but rather related to contract fraud and hacker attacks. (Note: CSW sued Bitcoin Cash (BCH) is a case brought by a Chinese citizen prosecuted for the offense of digital asset exchange in a US regional court. The plaintiff alleges “losses caused by money laundering” and stated that “relevant judicial authorities have been notified.”)

CSI classic case

In the second month after the ICO boom in 2017, the CSI classic case (The Classic Re case) entered a new phase

This project was initially created by a venture capital company called “CryptoCapital”, aiming to provide meaningful services for cryptographic assets and traditional banking services, such as loan business, hedge funds, and wealthy individuals. One of the founders of this project, early investor Peter Thiel, also participated. He founded the blockchain startup Synthetix and launched his first batch of ICOs at the end of 2020.

However, this model has led to some problems: on the CSI network, people cannot obtain funds from anywhere to purchase their products and services. To legitimize such a process and avoid being exploited by criminals, some people started using the CSI network for transactions or transferring tokens to third-party wallets. These protocols allow users to send bitcoins and other cryptocurrencies to others without having to wait for the amount of funds provided by exchanges. In addition, they can connect smart contracts on the CSI platform together to earn interest. This is different from many traditional financial instruments, as they often take a long time to execute operations. Due to the lack of necessary technical knowledge, security vulnerabilities, and fraudulent nature, most applications rely on centralized custodians, making their complexity and security difficult to guarantee.

Nevertheless, this approach has effectively expanded to the entire market. As of writing this article, there are over one million active accounts in the market. Over time, nearly one billion dollars’ worth is locked in their own reserves in these accounts, which is created by the stablecoin-based DeFi lending protocol Celer Network supported by Coinbase.

However, the CSI team believes that this goal can be achieved by adopting a more decentralized model while reducing friction costs.

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What is the CSW case (CSI classic case)?

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