Bit Jungle: Best Practices for Public Security’s Legal and Compliance in Handling Virtual Currencies

With the development of blockchain technology, virtual currency has been widely used worldwide, but it has also been used by criminals to commit crimes such as fraud, money laundering, and illegal fundraising. When handling virtual currency cases, public security organs face many legal, technical and cross-border law enforcement challenges. Especially because virtual currencies have high liquidity , large value fluctuations and difficulty in storage , public security organs often need to take quick disposal measures after seizing virtual currencies. This article will explore the main difficulties of public security organs in virtual currency cases and provide legal and compliant best practices.

**1. The main difficulties in handling virtual currency cases by public

security organs**

1. Difficulties in filing and application of law

At present, my country's legal regulatory policies for virtual currencies are constantly being updated, but there is still a lack of targeted criminal regulations. When investigating cases, public security organs usually file cases based on the crimes of fraud, illegal business operations, organized pyramid schemes, money laundering, etc. in the Criminal Law, but specific cases may involve multiple crimes, resulting in difficulty in characterizing them.

2. Transaction anonymity and traceability are difficult

Virtual currency transactions rely on blockchain technology and use decentralized methods to transfer funds. Some currencies (such as Monero and Zcash) are also anonymous, which increases the difficulty of tracing funds. In addition, criminals use methods such as jumping wallets, multiple address transfers, and coin mixing services (Tornado Cash) to further increase the difficulty of investigating the public security organs.

3. It is difficult to seize funds

The suspect cleverly hides the assets by storing virtual currency assets in his wallet account. During the case investigation, public security organs often find it difficult to obtain mnemonic words or private keys, resulting in the inability to directly seize the relevant wallet. In addition, the private keys of some hidden addresses may be controlled by multiple suspects separately. Even if funds are found to be deposited, how to effectively implement seizure still faces huge challenges.

4. Fund freezing challenges

In the event that the private key cannot be obtained and the assets are directly seized, freezing of funds becomes a more feasible measure. However, unlike traditional bank accounts, public security organs cannot directly freeze the virtual currency involved through banks, but instead rely on exchanges or stablecoin issuing institutions (such as Tether and Circle) to assist in the freezing. This not only requires the provision of legal and compliant judicial documents, but also requires in-depth understanding and precise application of blockchain technology to ensure the effectiveness of freezing measures.

5. Lack of channels for judicial disposal compliance

In the judicial disposal process, there is still a lack of unified regulations on how to deal with frozen virtual currencies in accordance with the law. Even if the public security organs successfully freeze the virtual currency of criminal proceeds, there are still many uncertainties in the subsequent compliance monetization (such as sales, auctions) and return of victims. Because virtual currencies have high liquidity and other characteristics, relying on a complete, compliant and executable virtual currency processing plan is crucial to improving the asset processing efficiency of virtual currency cases.

2. Regulations on Virtual Currency Processing

In order to maximize the value of the assets involved in the case, public security organs usually need to initiate disposal procedures as soon as possible within the scope permitted by law to ensure that the virtual currency can be reasonably cashed or processed under appropriate market conditions.

1. " Opinions on Further Standardizing the Disposal of Property Involved in Criminal Procedures"

The opinion clearly states that the public security organs can deal with specific property involved in the case, especially those with difficult storage conditions and large fluctuations in market prices , in accordance with the law. Especially in the management of high-risk assets such as virtual currencies, this provision provides a legal basis for flexible handling for public security organs.

2. " Provisions on Procedures for Handling Criminal Cases by Public Security Organs"

This provision provides clear guidance on the disposal of property involved in the case, pointing out that in the case of difficulties in asset management and excessive storage costs , the public security organs can handle it first within the statutory procedures.

3. " Regulations on the Management of Confiscated Property"

Although it mainly focuses on the management of confiscated property, it also involves that assets with large fluctuations in market prices, difficult storage or excessive expenses can be dealt with in accordance with the law.

4. " Several Provisions on the Management of Property Involved in the Case of Public Security Organs"

The provisions further strengthen the management mechanism of property involved in the case, and clearly state that when property has high liquidity or the management costs are too high , pre-handling measures should be taken in a timely manner.

These regulations fully reflect the clear attitude and determination of laws and regulations to deal with assets involved in the case with large price fluctuations, difficulty in storage and excessive storage costs.

**3. Best practices for public security organs to handle virtual

currency cases**

Based on the above difficulties in case handling, how to enhance the improvement of blockchain technology and blockchain traceability capabilities, how to handle legally and compliantly, and improve case handling efficiency. Bit Jungle Technology Co., Ltd. was established in 2018 and is deeply engaged in the field of blockchain security, focusing on blockchain traceability and asset compliance processing.

The Zhongkui system independently developed by Bit Jungle combines big data analysis, machine learning and multi-chain cross-verification technology to achieve efficient and accurate blockchain asset tracking. By studying domestic and foreign regulatory policies, the company has established legal and compliant virtual currency processing channels to ensure efficient execution of the entire process of case traceability from on-chain, risk identification to compliant disposal of final assets, help improve case handling efficiency and provide professional industry Blockchain security solution.

Bit Jungle virtual currency processing solution focuses on the following advantages:

●Bit Jungle Technology Co., Ltd., as a partner of the Hong Kong licensed exchange in China , strictly follows international regulatory standards, Chinese laws and regulations and fund anti-money laundering regulations to ensure compliance and safety of all operations.

●Relying on rich experience in solving cases, Bit Jungle independently developed the Zhong Kui big data platform, providing multi-dimensional blockchain fund analysis capabilities, greatly reducing the analysis threshold for case handlers. At present, the system has been put into use in public security organs in many places, providing strong technical support for law enforcement.

●The company is deeply engaged in the field of blockchain security, has strong ability to solve complex blockchain cases, and can efficiently implement cross-border asset losses, key clue breakthroughs and evidence acquisition. Its public business team can provide on-site case analysis support, and has successfully assisted the public security in solving many major cases, including the supervision of the Ministry of Public Security, and empowering law enforcement agencies through the Zhongkui system to achieve the full range of blockchain cases from 0 to 1. Processing ability to solve cases .

●At the same time, the company implements a margin system to ensure the absolute safety of the assets to be processed by the public security organs, and can guarantee tens of millions of asset disposal and transactions at one time, helping to improve the security management capabilities of funds.

●Bit Jungle has always been committed to creating full-process traceable, traceable and auditable compliance solutions to provide professional support for law enforcement agencies and financial security.

3. Write at the end

With the increase in virtual currency cases, public security organs face multiple difficulties in law enforcement , such as legal application, fund tracking, asset disposal, and cross-border cooperation . To improve the efficiency of blockchain cases, we need to continuously improve laws and regulations , and with the help of technical support of blockchain security companies like Bit Jungle , relying on the "Zhong Kui" big data system to improve on-chain traceability and fund analysis capabilities, so as to be more efficient To promote the investigation and handling of cases, and through the Bit Jungle virtual currency processing plan, we will ensure that the disposal of virtual currencies involved in the case is legal, compliant and safely disposed of.