A software engineer in Shanghai has been sentenced to three years in prison after providing illegal virtual private networks (VPNs) to hundreds of customers since 2016, reports the People’s Court Daily (in Chinese).
The man, surnamed Dai 戴, was also ordered to serve three years probation and pay a fine of 10,000 yuan ($1,400).
According to the People’s Court of Shanghai Baoshan District, Dai was charged with “offering illegal tools like computer programs that can invade and control computer information systems.” More specifically, Dai was found guilty of making unlawful profits by “creating a website selling VPN services” and “renting foreign servers that grant customers access to foreign websites that they can’t visit with a domestic IP address.”
Dai, a software engineer working for a securities management company, was arrested in October 2017 and admitted that since he started the VPN business in April 2016, hundreds of people had used his service to jump China’s Great Firewall.
It’s reported that this is the first case in Shanghai where a VPN service provider faced criminal penalties.
But elsewhere, others have ended up in prison for conducting the same business. Last year, Wu Xiangyang 吴向阳, a man from the Guangxi Zhuang autonomous region, received a five-and-a-half-year prison sentence and a 500,000 yuan ($76,000) fine for selling VPNs since 2013 without a proper license. Earlier last year, Deng Jiewei 邓杰伟, another VPN provider from Guangdong Province, was sentenced to nine months in prison.
The People’s Court Daily warns that while VPNs are prevalent in China, such services have always been in a legal “gray area” and have never received official approval from top internet regulators.
In 2017, amid rumors that Beijing was planning to order three state-run telecommunications firms — China Mobile, China Unicom, and China Telecom — to bar individuals from using VPNs, the Ministry of Industry and Information Technology (MIIT), China’s top regulator overseeing the country’s internet and telecom industries, said that its agenda was not to enforce a complete blockage of individual access to the global internet. However, the ministry admitted it was working on measures to regulate VPN services.