The Value Determination Dilemma in Virtual Money Cases

In recent years, the number of criminal cases involving virtual money has shown an upward trend. In addition to common cases such as money laundering, fraud, pyramid schemes, and operating illegal casinos using virtual money, there has been an increasing number of fraud and theft cases involving natural persons and virtual money. These cases provide valuable insights for the defense and investigation of criminal cases related to coins.

This article will explore the key issue of how to price the virtual money involved in criminal cases related to virtual money, through a fraud case that evolved from a personal investment dispute (Case No.: (2019) Jing 0105 Criminal Initial 2172).

Case Summary

Between June and July 2018, Zheng deceived Wang under the pretext of assisting him in investing in a blockchain project in Chaoyang District, Beijing, swindling Wang out of 32 coins and over 1000 coins. Zheng resold the obtained coins for a profit of over 1.64 million yuan. Later, after being notified by the public security authorities, Zheng voluntarily surrendered.

After the court hearing, it was determined that Zheng had fabricated facts to fraudulently obtain property from others with the purpose of illegal possession, and the amount involved was particularly large. He should be held criminally responsible for fraud. In the end, the court sentenced Zheng to ten years in prison and a fine of 200,000 yuan.

The Court's Attitude Towards Virtual Money Pricing

In this case, the Chaoyang District Court of Beijing clearly stated: "The value of Virtual Money is influenced by national laws and regulations as well as industry regulatory policies, and should not be directly determined in individual cases." This statement can be regarded as the most standard judicial criterion at present. The court ultimately used the proceeds of crime amounting to over 1.64 million yuan obtained by the defendant Zheng as the amount involved in the case.

Virtual Money Related Policies and Practices

On September 15, 2021, the notice issued jointly by ten ministries of the country regarding "Further Prevention and Handling of Risks of Speculation in Virtual Money Trading" classified activities related to virtual money as "illegal financial activities," including providing information intermediary and pricing services for virtual money trading.

In judicial practice, there are differing opinions on whether the pricing determination of virtual money involved in a case by judicial authorities or their entrusted third-party institutions falls under the prohibited behaviors mentioned in the above notice. Some believe this falls within judicial activities and is not within the scope of prohibition; while others argue that this is essentially still a pricing activity for virtual money transactions, violating the current national regulatory policies on virtual money.

Solution

To better address the valuation issues concerning the virtual money involved in the case, the approach taken by the Chaoyang District Court of Beijing is worth emulating: in principle, there is no proactive valuation of the virtual money involved. When there is an amount from resale, the amount involved is primarily determined by the resale amount. If there is no resale amount, consideration will be given in the order of the purchase price of the virtual money involved, the amount converted to cash from disposal, judicial appraisal or evaluation amount, etc.

In general, judicial authorities should not actively price the virtual money involved in the case, unless it is impossible to determine the amount involved through other means, and the amount involved is necessary for conviction and sentencing.

Conclusion

The legal status of Virtual Money has always been a perplexing issue. This is mainly because our regulators have a relatively simplistic and superficial understanding of Virtual Money, attempting to fully control it through a single regulatory document. However, this not only failed to achieve thorough control but also caused significant confusion for other law enforcement and judicial agencies.

To solve this problem, modifying relevant regulatory policies may be a feasible direction. The specifics of how to modify them still require further discussion and research.