Focus on the disposal of virtual currency involved in the case: nearly 60 experts and scholars discuss supervision and practice difficulties

Original text: Jiang Anjie , all-media reporter, Rule of Law Daily

In order to implement the spirit of the Third Plenary Session of the 20th Central Committee of the Communist Party of China and give full play to the supporting role of the rule of law in the modernization of the national governance system and governance capabilities, on January 19, the Law School of Renmin University of China and the Criminal Law Research Institute of Renmin University of China A seminar on “Virtual Currency Disposal Involved in Cases” jointly sponsored by the Center and Beijing Zhongyin Law Firm was held in Beijing. Nearly 60 people attended the meeting, including representatives from the Legal Affairs Committee of the Standing Committee of the National People's Congress, the Supreme People's Court, the Supreme People's Procuratorate, the Ministry of Public Security and other practical departments, as well as representatives from legal theory circles, lawyers and enterprises.

Current status and prospects of legal regulation of virtual currency

The first unit, "Current Situation and Prospects of Legal Regulation of Virtual Currency," was hosted by Cheng Lei, deputy dean and professor of the Law School of Renmin University of China.

Yang Dong, Dean and Professor of the Law School of Renmin University of China, expressed his views based on the development history of virtual currencies and the experiences and practices of virtual currency supervision in various countries. He pointed out that emerging virtual assets such as virtual currencies and the legal issues involved in them are hot areas of international exchanges and are also issues that our country should focus on in building foreign-related legal rule. In recent years, my country's virtual currency regulatory capabilities and regulatory system have made great progress, and their development prospects are broad and worthy of in-depth and full study.

Shi Yanan, director of the Criminal Legal Research Center of Renmin University of China, spoke from three aspects: the definition of the legal nature of virtual currencies, the construction of a regulatory system, and overseas recovery of stolen goods in cases involving virtual currencies. He believes that in judicial practice, considering the convenience of case handling and the simplicity of relevant program design, virtual currencies should be regarded as general equivalents. The supervision of virtual currency should consider its coordination with the legal currency supervision system. On the issue of recovering stolen goods in cases involving virtual currency, the existing thinking should be changed, and attention should be paid to the development and application of new legal tools on the basis of clarifying that virtual currency is a general equivalent.

Xue Haibin, Legal President and Chief Compliance Officer of Hexagon Group Greater China, expressed his views on the definition of virtual currency and related professional issues based on his overseas practice experience. He believes that virtual currency has the characteristics of decentralization and anonymity. At present, the total market value of mainstream virtual currencies has exceeded hundreds of millions of dollars, and it has huge development potential. Countries have different identifications of their nature, ranging from legal tender, legal payment methods, virtual goods, digital assets, financial products to complete bans. China should dynamically pay attention to the positioning of virtual currencies from the perspective of development, tolerance and improvement of international competitiveness based on its own characteristics.

Ms. Yang Xia, chairman of Chengdu Lian'an Technology Co., Ltd. and associate professor of the University of Electronic Science and Technology of China, combined her practical experience in investigating virtual currency crime cases to summarize and share the main types of virtual currency-related crimes and the main problems in the current regulatory regulations, and addressed Proposed relevant countermeasures and suggestions.

Liu Xiaoyu, Chairman of the Management Committee and Senior Partner of Bank of China Law Firm, sorted out the regulatory policies of virtual currencies in major countries and regions in the world such as the United States, the European Union, and the United Kingdom. On this basis, he summarized the legal attributes of virtual currencies, including virtual property theory, digital Commodity theory, securities theory, currency theory and other views. He pointed out that the discussion of virtual currency regulatory policies should not be separated from its underlying blockchain technology. my country’s current “prohibitive” regulation is not conducive to participating in global Web 3.0 competition and is not conducive to the industrial development of the digital economy. It should be in the context of preventing risks. On the basis of this, we should appropriately adjust existing regulatory policies.

Yu Haisong, deputy director of the Research Office of the Supreme People's Court, served as the panellist of this unit. He pointed out that discussions on virtual currency-related issues in our country must be based on current regulatory policies. At present, my country’s regulatory policies on virtual currencies are gradually becoming clearer. In practice, there is a realistic need for the disposal of the virtual currency involved, but how to dispose of it in compliance with current regulatory policies is actually worthy of further study. Overall, the disposal of virtual currencies involved in the case needs to be further regulated:

• First, further clarify the legal boundaries of virtual currency disposal methods at the policy level;
• The second is to further optimize specific issues such as disposal timing and procedures at the technical level.

Practical problems and countermeasures for virtual currency disposal (1)

The second unit, "Practical Problems and Countermeasures of Virtual Currency Disposal (1)" was hosted by Zhang Xiaojun, member of the Management Committee and senior partner of Bank of China Law Firm.

The relevant person in charge of the property management detachment of the Legal Affairs Bureau of the Beijing Municipal Public Security Bureau pointed out that virtual currency crime has become an important manifestation of cybercrime, which is specifically divided into fraud crimes in the name of investing in virtual currency and theft using virtual currency as the object of crime. , fraud and other property-related crimes, and using virtual currency as a tool to conduct illegal transactions. Limited by the decentralization, transaction anonymity, and transnational nature of virtual currency, we face a series of law enforcement difficulties in actual case handling, including difficulties in characterization, verification, custody, and disposal.

Guo Shuo, a professor at the Institute of Litigation Law of China University of Political Science and Law, elaborated on different options for the disposal of virtual currencies by citing specific cases. The current nature of virtual currencies and related businesses determines that there are no effective regulatory measures for this issue, which has led to relatively large differences in judicial practice. Big controversy. He believes that issues such as the return of victims’ property and virtual currency intermediaries should also be focused on.

Chen Shi, deputy dean of the School of National Governance at Zhongnan University of Economics and Law, pointed out that currently, virtual property has not been legally defined, and there is no legal basis for whether virtual currency is criminally involved property. In judicial practice, the preemptive disposal of virtual currencies involved in cases has become a normal trend and does not comply with current legal regulations. In judicial practice, the method of entrusting a third party to dispose of liquidated virtual currencies lacks legal supervision and risks triggering new crimes. Therefore, it is necessary to clarify the nature of the virtual property involved, including virtual currency, the disposal subjects, methods and procedures, the requirements and legal responsibilities for disposal, and promote the legalization and standardization of the disposal of the virtual property involved.

Liu Renqi, deputy dean of the Criminal Law School of Northwest University of Political Science and Law, shared the topic of "Victim Participation Rules in the Disposal of Virtual Currency Involved in Cases".

• On the one hand, the current method of disposing of the virtual currency involved in the case basically involves the public security organs entrusting a third party to realize it, but this basically excludes the participation of the victim;
• On the other hand, to improve the path for victims to participate in virtual currency disposal, victim participation methods can be classified according to whether they are profitable. Some disposals that allow victims to participate should comply with the rules of legality, rules of knowledge, rules of consent, rules of public order and good customs, and rules of maximizing interests. wait.

Wang Tuo, head of the financial case handling team of the Fourth Procuratorate of the Supreme People's Procuratorate, and He Ting, deputy dean and professor of the Institute of Criminal Legal Sciences of Beijing Normal University, held talks. Wang Tuo believes:

• First, we must face up to history and reality, and cannot ignore the decisive role of regulatory documents in curbing currency speculation. At the same time, we must speed up top-level design for various current problems involving virtual currency crimes.
• Second, it is necessary to strengthen the coordination of criminal justice and administrative supervision and abide by the principle of the unity of law and order.
• Third, we must strive to reach a consensus on the nature of virtual currencies, especially the civil and criminal identifications that cannot conflict with each other.
• Fourth, scientific and reasonable procedural norms must be set up to prevent various risks in judicial handling.
• Fifth, we must pay attention to the complementarity of technology and case handling.

He Ting proposed that virtual currency disposal should focus on solving its qualitative, classification, supervision and procedural standardization issues. Virtual currencies are not contraband and can be used as objects of property crimes. There is room to treat them as a special kind of property involved and regulate how to deal with them. It is necessary to pay attention to distinguish the different categories and different functions of virtual currencies in different types of crimes, and then adopt different disposal paths, standardize the disposal of virtual currencies involved in the case through the effective interaction of technology and legal norms, and comply with the requirements of substantive fairness and justice.

Practical problems and countermeasures for virtual currency disposal (2)

The third unit, "Practical Problems and Countermeasures of Virtual Currency Disposal (2)" was hosted by Li Zheng, Secretary of the Party Committee and Senior Partner of Bank of China Law Firm.

Dong Kun, a researcher at the Institute of Law of the Chinese Academy of Social Sciences, pointed out that compulsory disposal of property is usually regarded as evidence preservation rather than property preservation. However, evidence preservation may obscure the attributes of the property and lead to issues such as prior disposal of evidence and infringement of property rights. At present, the law does not have clear provisions on the disposal of virtual currencies, but the disposal methods in practice, especially entrusting third-party disposal, not only involve legality issues, but may also lead to serious consequences such as illegal entry of funds and long-arm jurisdiction. In addition, citizen participation in the entire disposal process is low, and the law urgently needs to be further improved. At the same time, there is also a paradox in early disposal of virtual currencies. It is necessary to weigh the national losses and the rights and interests of the parties to ensure that the final disposal complies with the rules of litigation.

Zhu Tonghui, associate professor at Nankai University School of Law, said that although the current law imposes strict restrictions on the disposal of virtual currencies, there are still companies exploring legal disposal methods. He shared four major methods to prove the correlation between virtual currency and suspects’ property: electronic evidence identification technology, judicial investigation, remote inspection and two-way correlation technology.

Nie Youlun, associate professor at East China Normal University Law School, believes that the essence of virtual currency disposal is the intervention and protection of property rights. From a constitutional perspective, the disposal of virtual currencies involves interference with property rights, which should be subject to legal reservations. However, since there are no provisions in the Criminal Procedure Law, it is necessary to solve the basis issue at the legislative level, clarify the specific basis and relevant measures, and ensure that they comply with the principle of proportionality.

Guo Zhihao, a partner at the global headquarters of Yingke Law Firm, believes that the primary problem in the disposal of virtual currencies is that the definition and scope of application of virtual currencies are blurred, and case handling agencies often confuse blockchain-based virtual currencies with ordinary virtual currencies. He proposed that virtual currencies have dual legal attributes, one is network property, and the other is that some virtual currencies have securities attributes, and different types of virtual currencies should be distinguished.

Li Wei, associate professor at the Law School of Central University of Finance and Economics, and Zhang Yuxiang, a cadre of the Criminal Law Office of the Legal Affairs Committee of the Standing Committee of the National People's Congress, held talks. Li Wei believes that the so-called "virtual currency disposal" issue should be explored from the perspective of objects rather than currency. From the perspective of objects or assets, we can avoid the entanglement of its own legality and then construct relevant rules for preservation and disposal; under the current normative framework , which can be unified through the coordination between the judicial department and the financial department. Disposal at the same time, such as becoming state-owned assets through confiscation, then establishing a central or local platform or establishing an overseas asset management department, and achieving effective disposal of assets through financial instruments; considering the national strategy of digital assets in the future, blockchain data assets can be They will be managed accordingly as restricted circulation items.

Zhang Yuxiang believes that in practice, judicial organs have certain difficulties in disposing of virtual currencies involved in cases, and there is a need for policy and institutional supply. Various parties still have different understandings of virtual currency, including the legal attributes of virtual currency, the disposal procedures and custody of virtual currency, etc. We are also paying close attention to this research. Improving the system of compulsory measures such as seizure, seizure and freezing, and the disposal system of property involved in the case is a major issue for the improvement of the criminal litigation system. How to deal with the virtual currency involved in the case is also an important issue. We will continue to follow up on relevant policies, judicial practices and all aspects opinions and promote the improvement of relevant systems in a timely manner.

Proof and identification of virtual currency

The fourth unit, "Proof and Identification of Virtual Currency," was hosted by Zheng Jia, partner of Bank of China Law Firm.

Gao Tong, a professor at Nankai University School of Law, believes that the difficulty in proving virtual currency is mainly due to the weak direct correlation between virtual currency and criminal facts. There are transnational factors in currency flow, making it difficult to track the complete flow of funds, and it is difficult to determine the amount of crime and the amount of crime. The suspect’s criminal intention. Therefore, the key to proving virtual currency lies in a sound proof mechanism for the virtual currency involved:

• Strengthen the evidence base of the virtual property involved in the case, use advanced technologies such as blockchain analysis tools for tracking, and conduct cross-departmental cooperation with cryptocurrency organizations, taxation, banks, etc.;
• Strengthen the review of the capital flow process between legal currency and virtual currency; conduct diversified evidence chain analysis using professional technical means such as oral confessions, electronic data, and transaction record third-party institutions;
• Simplify the proof model of cybercrime facts, comprehensively identify the virtual currency involved, distinguish its litigation value and adopt different standards of proof. For example, the virtual currency as the basis of evidence for conviction and sentencing must meet the true and sufficient standard, while the proof standard for the disposal of property involved in the case must meet the standard of proof. The preponderance of evidence standard will suffice.

Liu Yang, senior partner of DeHeng Law Firm, said that the judicial authorities' disposal of virtual digital currencies is legitimate, and the judicial authorities can entrust professional institutions to dispose of virtual currencies. Lawyer Liu suggested that state-owned banks should be the main party in asset disposal. State-owned banks themselves are responsible for carrying funds and also have overseas branches, which can ensure the security of assets in the disposal of virtual currencies.

Pan Xia, associate professor at the Ocean University of China Law School, pointed out that cross-border virtual currency transactions also involve jurisdiction and cross-border judicial cooperation:

• The first is the issue of criminal law and procedural law, including the criminal jurisdiction of the case and criminal proceedings such as sealing, freezing, and seizure. Therefore, legislation needs to make detailed provisions on the jurisdictional connection of this type of cases.
• Secondly, whether issues involving virtual currencies can be linked to my country’s laws and regulations related to data security, and expedient measures can be introduced using existing data security regulations;
• Or sign a limited-scope cooperation agreement with other countries to jointly handle cross-border virtual currency cases.

Wang Yijue, a lecturer at the Law School of Beijing Jiaotong University, pointed out that the current disposal of virtual currencies involved in criminal cases faces dual technical and legal dilemmas. The former has made a series of progress with the improvement of investigation technology, while the latter is faced with how to optimize relevant criminal laws under existing regulatory policies. Interpretation plan for the provisions.

Gao Xiansong, director of the Information Security Emergency Response and Disposal Center of the Beijing Network Industry Association, and Chen Jianjun, a lecturer at the Criminal Law School of Northwest University of Political Science and Law, held talks. Gao Xiansong pointed out that illegal and criminal activities such as gambling, illegal fund-raising, fraud, pyramid schemes, and money laundering have produced a large number of virtual currencies involved, and have also spawned a large number of virtual currency disposal companies . The methods of disposing virtual currencies include direct hedging of domestic and overseas funds, etc., from the disposal methods Even the collection of service fees cannot be completely legal and compliant. The current difficulty in the seizure, control and disposal of virtual currencies lies in the lack of smooth official channels and excessive reliance on third-party disposal companies.

Chen Jianjun proposed that the first step in legislation should be to clarify the nature of virtual currency, that is, virtual currency is virtual property. As far as the investigation of virtual currencies is concerned, on the one hand, we must strengthen technical means and strengthen international technical exchanges and cooperation; on the other hand, for cases involving virtual assets, we can consider the flexible application of the existing relatively mature leniency system for guilty pleas and punishments to encourage criminal suspects. People voluntarily confess the property involved in the case, or provide clues to potential and more serious virtual currency crimes, thereby reducing the pressure on public security and judicial organs to track and prove virtual currency. In addition, the identification of conviction and sentencing facts for virtual currency can also be achieved by updating the connotations of guilty plea and punishment.

Cheng Lei and Li Zheng made a summary. Experts attending the meeting conducted an in-depth discussion on the disposal of virtual currencies involved in the case from multiple dimensions, covering the concept, legal attributes, status of foreign legislation and disposal practices in various places, etc. of virtual currencies. However, in the current process of virtual currency disposal in my country, there are problems such as imperfect legislation and lack of legal interpretation space, which makes the disposal of virtual currency face greater legal risks and practical difficulties. As an emerging asset class, virtual currencies urgently need to be improved through legislation to ensure their legality and security. At the same time, cross-border collaboration and supervision can be strengthened to provide effective legal protection for the standardized disposal of virtual currencies involved in cases.