Judicial Disposal of Virtual Money: Challenges and Innovations

Recently, an article titled "Criminal Involvement in the Disposal of Virtual Money: Challenges, Innovations, and Judicial Responsibility" has attracted attention in the industry. The article was written by staff from the Shenzhen Intermediate People's Court and published in the People's Court Daily. Although the discussion in the article is somewhat technical and difficult to understand, as a representation of the judicial perspective, it is still worth our in-depth analysis.

Overview of the Main Content of the Article

The article first introduces the definition, characteristics, and trading methods of Virtual Money. Then, based on the relevant policies from the central bank in 2013 and 2017, it points out that there are currently no legal Virtual Money trading platforms in our country, and there is a lack of evaluation and identification rules for Virtual Money.

The author emphasized the difficulties in handling criminal cases related to virtual money in judicial practice, including the limitations of traditional methods of investigation and asset freezing, as well as the challenges of value assessment and liquidation. It is noteworthy that the Supreme Court has listed the "disposal of virtual money involved in cases" as an annual judicial research topic.

The article also mentions the practices of the Futian District of Shenzhen in safeguarding the involved virtual money and suggests exploring the option of entrusting a third-party institution to liquidate it abroad after filing with the relevant departments, and then transferring the funds to the court's foreign exchange account. For virtual money that endangers national security and public interests, the author advocates for its destruction.

Key Point Analysis

1. The property attributes of virtual money have been widely recognized in criminal justice practice, but there are still controversies in the civil field.

2. Currently, the handling mode of criminal cases involving coins is that the investigation authorities seize Virtual Money and transfer the relevant information along with the case to the procuratorate and the court. This practice is not innovative, but rather a helpless response to technological limitations.

3. The suggestion to entrust "qualified third-party institutions" within the territory to handle Virtual Money is in contradiction with the current regulatory policies. According to existing regulations, no domestic entity is allowed to engage in the exchange business between Virtual Money and fiat currency.

4. The feasibility of the court receiving overseas Virtual Money disposal funds through the opening of foreign currency accounts is debatable. Existing regulations impose clear restrictions on the purposes for which courts can open foreign exchange accounts, and the disposal of the involved Virtual Money does not meet these conditions.

5. The handling of privacy coins, simple destruction may lead to an appreciation of the circulating privacy coins in the market, and may not fundamentally solve the problem.

Future Outlook

The judicial disposal of Virtual Money is complex mainly because domestic regulations do not allow the exchange of Virtual Money and fiat currency. If future policies can be adjusted to permit the establishment of compliant Virtual Money trading institutions, the judicial disposal of the Virtual Money involved in cases will become simpler and more direct.

Overall, although the current judicial disposal model still faces many challenges, with the development of technology and the improvement of policies, we have reason to believe that more efficient and reasonable handling solutions will emerge in the future.