Using PVN to farm airdrops and earning 5 million, all confiscated? How should we view this?

Introduction

Today, a friend forwarded me an article by fellow lawyer Zhang Suhang titled “Airdrop Studio Raided! 5 Million Yuan of Illegal Gains Confiscated!” which prompted me to analyze whether engaging in airdrops truly carries such significant risks. After carefully reading Zhang’s article, I believe that, as a lawyer in the crypto space, it’s necessary to combine my practical experience, understanding of VPN usage (“scientific internet access”), airdrop activities, and my long-term dealings with public security authorities to write an analysis on this matter.

1. Case Overview

According to Zhang’s article, he is handling a case involving a studio that was raided, involving three individuals who reportedly earned 3 million yuan in a year through airdrops. Generally, in legal jargon, “being raided” is akin to “being pressured,” implying involvement in criminal activity. However, Zhang states that his clients were not involved in criminal offenses related to virtual currencies but violated laws related to “scientific internet access.” As a result, they had 5 million yuan of illegal gains confiscated, along with their phones and computers, and were fined 10,000 yuan.

A small question arises here: if they earned 3 million yuan in a year, why was only 5 million yuan of illegal gains confiscated? Lawyer Liu speculates that they might have been involved for over a year. However, Zhang did not specify this, and we should not guess. For now, let’s assume the total airdrop earnings were 5 million yuan.

2. VPN Usage = Illegal? Wrong!

Zhang’s view is that using VPNs to bypass internet restrictions constitutes administrative violation, and public security authorities can fine individuals within 15,000 yuan and confiscate illegal gains if any. This is based on the “Interim Regulations on the Management of International Networking of Computer Information Networks,” Article 6: “To connect directly to the international network, one must use the international exit channels provided by the Ministry of Posts and Telecommunications’ national public telecom networks. No unit or individual shall establish or use other channels for international networking.”

My view, and that of Zhang, are completely opposite: simply using VPNs to bypass the Great Firewall does not violate any current laws, regulations, departmental rules, or normative documents in China. Using VPNs does not constitute establishing or using channels for international networking; rather, VPNs typically use the international exit channels provided by state telecom operators (such as the major three telecom providers). In essence, VPNs are just tools to circumvent GFW blocks on certain foreign IPs (like Google). For detailed technical and legal explanations, see my earlier articles “Is there a legal risk in using VPNs or other tools to bypass internet restrictions?” and “Does ‘VPN bypass’ constitute a crime?”

The key issue is not whether someone uses a VPN, as no one has the authority to declare VPN use illegal per se. The critical question is: what activities are performed after using a VPN? If someone uses VPNs to search Google for academic papers, browse Instagram, or similar activities, law-abiding police wouldn’t say you’re breaking the law. But if VPNs are used for activities such as (excerpt from the Cybersecurity Law):

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then the situation changes.

So, the core question becomes: Is airdrop farming illegal? If it is illegal, then public security authorities confiscating earnings makes sense; if not, then they cannot simply confiscate earnings based on the so-called “VPN illegal use.”

3. Is Airdrop Farming Illegal?

Regarding airdrop farming, I have discussed this in many of my previous videos. I won’t analyze extensively here, but my conclusion is that airdrop farming is not illegal.

Previously, a programmer from Chengde was fined over 1 million yuan for coding for an overseas company while using VPNs, but he filed an administrative reconsideration, and the outcome is unknown (if anyone knows more, please contact Lawyer Liu). I also wrote an article analyzing “A programmer’s income confiscated for ‘VPN use’: Is ‘scientific internet access’ safe?” Another case involved “Using VPN tools to invest in cryptocurrencies and getting arrested—Is trading crypto illegal?” but no specific administrative penalties were mentioned. In both articles, I expressed my view that: coding for overseas companies and trading cryptocurrencies are not illegal activities.

For example, with airdrops like Binance Alpha that recently gained popularity, common methods include using multiple accounts to farm tokens or using bots to “millisecond” farm. Whether it’s Binance, a foreign crypto exchange, or decentralized exchanges, wallets, or public chains, as long as these platforms issue tokens, they are considered “illegal financial activities” under Chinese regulations like the 2017 “9.4 Notice” and the 2021 “9.24 Notice.” However, these regulations target the platforms, not the users. Using these platforms does not automatically make the user illegal.

Based on China’s regulations and laws concerning virtual currencies, there is no basis to conclude that “airdrop farming” is illegal. If someone claims it is, they should specify which law or regulation it violates; if not, then no prohibition exists. Of course, if operating a compliant domestic company engaged in legally protected activities, one should avoid reckless “farming” activities. There have been cases where using technical means to farm discounts or coupons from platforms like KFC or LaLa resulted in convictions for theft or illegal access to computer information systems.

Therefore, my personal view is: since VPN use itself is not illegal, and airdrop farming is not illegal, why would it be considered illegal to farm airdrops while using VPNs?

I am not writing this to question Lawyer Zhang but to offer a different perspective for friends who are anxious about these issues. There are wrongful criminal cases, and even more wrongful administrative penalties. If Zhang’s clients truly lost 5 million yuan, there are many avenues for legal remedies to recover losses. Today, with the Ministry of Public Security explicitly banning offshore fishing, I believe very few officials would dare to pursue cases recklessly and unlawfully.