How should the legal and compliant disposal of virtual currency be reflected?

Last week, the People's Court published an article titled "Standardization of Judicial Disposal of Virtual Currency," which signifies the end of the era of barbaric judicial disposal of U in the past few years.

Last year, people came to me every day, telling me about their strong connections and how they could get first-hand judicial disposal of USDT.

And they guaranteed that it was a first-hand resource. Many authorities didn't know what to do and needed to find a professional organization to handle the disposal. They made it clear that they were not intermediaries and could directly connect with the leadership.

How to crack them?

I just need one sentence: "First, transfer 2000 RMB to my WeChat chat box, I won't charge, then we can have a one-on-one voice communication. After the communication is finished, I will refund the money." Then provide the wallet address, and the other party will immediately back off.

This is the most cost-effective way to quickly and effectively distinguish between true and false resources. There are many judicial U, and now local authorities are gradually losing their power. There are also specific institutions providing guidance, and there is absolutely no need for intermediaries to solicit business everywhere.

A genuine resource generally has many intermediaries. In the process of trading, even a business car's intermediary cannot accommodate them. Yes, it's that exaggerated.

In current judicial practice, the disposal of virtual currency has been a focus of attention for several years. Those with connections have long made a fortune. According to the "2022 China Virtual Currency Judicial Disposal Report," the total amount of virtual currency awaiting disposal by judicial authorities has reached an astonishing figure, involving various mainstream virtual currencies such as Bitcoin (BTC), Ethereum (ETH), and Tether (USDT), with a total estimated value exceeding tens of billions of US dollars.

According to the SAFEIS Security Research Institute, in 2023, China had a total of 428 cases of virtual currency-related crimes, a decrease of 88.9% from 2022, but the overall amount involved increased sharply to 430.719 billion RMB, about 12.36 times that of 2022. Virtual currency has gradually become one of the main criminally involved virtual assets in China.

These data only cover known virtual currencies that have formally entered the judicial process. The actual number may be much larger because many cases are still under investigation and have not been fully counted.

Yes, you read that right. Most of those who claim to have first-hand judicial U disposal are mostly intermediaries and deceivers. They don't even know who their upstream is. This lawless social rule has led to the emergence of many scammers. The era when most people were still scamming you for margin has passed. More often, those with resources lack the funds themselves, so they need to release information through intermediaries and conduct prepayment operations.

In the past, the formal judicial disposal process was actually very simple: issuing an invitation letter, signing a contract, signing a confidentiality agreement, displaying the wallet address, preparing funds, making payments to the treasury account, and completing the transaction.

So those who show you official documents are all fake because the confidentiality agreement is there. According to the "Legal Forum" in the fourth issue of 2022, the fourth-level director of the Economic Investigation Detachment of the Guangzhou Public Security Bureau said: There are many judicial difficulties in combating virtual currency crimes.

Due to the successive release of the "Announcement on the Prevention of Risks from Token Issuance and Financing" in 2017 and the "Notice on Further Preventing and Disposing of Risks from Virtual Currency Trading Speculation" in 2021, strict restrictions on virtual currency trading have been further clarified. These restrictions not only limit ordinary people but also have far-reaching implications for judicial practice, especially in the legal determination of the nature of virtual currency and its judicial disposal process, posing new challenges and requirements.

Traditional disposal methods such as auctions and sales are difficult to implement due to violations of existing regulations…

In the face of the judicial disposal of virtual currency, many public security agencies have also actively explored different disposal methods. For example, Shandong Province and Fujian Province have proposed different disposal methods, including negotiating with the issuer for repurchase, giving priority to auctions, and entrusting third-party organizations for disposal.

However, these attempts still face challenges in terms of compliance, regulatory gaps, and risk control at the operational level. Current disposal methods, whether through third-party company transactions or entrusting overseas companies for realization, all carry compliance risks, including but not limited to official misconduct, violation of the prohibition of virtual currency speculation policy, and foreign exchange management regulations.

Although public security agencies have tried various disposal methods, due to the lack of unified standards, there are significant differences in execution across regions, and some disposal methods such as domestic OTC transactions have been reduced.

Controlling virtual currency in its original way may lead to a loss of control, as you would continue to retain the assets in the hands of the parties involved. In practice, law enforcement agencies have explored and attempted to transfer the virtual currency in the accounts of criminal suspects to accounts created by public security agencies, with the public security agencies holding the private keys exclusively to ensure exclusive control.

However, according to legal provisions, public security agencies are not allowed to dispose of the property involved in the case before the end of the litigation process. The ownership of the property still belongs to the original owner until the court makes a judgment on the disposition of the property and its proceeds, as well as the criminal tools. Without a court judgment, the assets of the parties involved cannot be disposed of, which is also the reason why many bank cards cannot be frozen or deducted. Therefore, transferring ownership of virtual currency to public security agencies without a court judgment violates the regulations on the custody of property involved in the case and is illegal.

Furthermore, public security agencies have an obligation to diligently care for the property involved in the case. Although virtual currency does not suffer physical damage, it often experiences extreme price fluctuations, which may lead to depreciation. Therefore, it is necessary to remove it from circulation and ensure its current value through auction or sale, with the proceeds temporarily held by the public security agencies.

However, there is a difficulty here: according to current regulations, providing settlement services for virtual currency is considered illegal, and no financial or payment institution is allowed to provide settlement services for virtual currency. There are no officially recognized exchanges in China that can auction or sell confiscated virtual currency.

Moreover, after a court judgment becomes effective, the realization and transfer of virtual currency to the national treasury also face the embarrassing situation of having no legal disposal channels.

In addition to the above, the judicial disposal of virtual currency typically faces many legal issues: first, the issue of ownership determination. In terms of evidence collection, judicial authorities face the main challenge of accurately tracking and confirming ownership in the anonymous trading environment of virtual currency.

Although the complex transactions of virtual currency may obscure the flow of funds, making it difficult for public security agencies to penetrate the funds, its characteristics of being open and unchangeable on the chain can serve as a starting point for data analysis and clue discovery.

The solution of public security agencies is to engage in police-enterprise cooperation, involving blockchain technology companies in the investigation, using on-chain tracking technology to label all public wallet addresses on the blockchain, forming a large amount of labeled data. This provides an opportunity for blockchain companies, technical investigation companies, and asset disposal companies to participate.

The issue of virtual currency valuation is another major challenge. The evaluation of the value of virtual currency is crucially important due to market volatility and the choice of evaluation timing. The price is influenced by various factors, and determining the evaluation timing to reflect the true value of virtual currency becomes a major challenge. Furthermore, because laws and regulations clearly prohibit any entity from pricing virtual currency, it seems unsolvable.

Finding a balance between legal channels and efficient transactions to ensure that the realization process complies with laws and regulations is also a challenge.

Therefore, in response to the complexity and challenges of the disposal of virtual currency, the People's Court Report points out that China's judicial practice urgently needs to introduce a comprehensive set of guidelines for the judicial disposal of virtual currency, providing clear legal basis and operational norms for this emerging field.

If this is truly implemented, these guidelines should cover multiple dimensions of the legal status of virtual currency, compliance requirements, asset disposal procedures, legal responsibilities, etc., and will create a more fair, transparent, and secure market environment, promoting the healthy development of the virtual currency industry, which is actually a good thing.

And all of this, there is the shadow of stablecoins in Hong Kong!!! Where will the uncles develop in the future? This may also be your opportunity.

Specialized documents for the judicial disposal of virtual currency-related cases may be formulated, specifying the methods, procedures, details, and conditions of the disposal, providing a legal basis.

In terms of disposal methods, due to the different prices of virtual currency, public bidding may be used, and a national or regional virtual currency judicial disposal platform may be established to handle such cases through bidding, with the final auction price being the basis for realization funds to be uniformly turned over to the national treasury.

However, this also involves legal transactions, but it may also be realized because there may be an industry access system, and unofficial transactions by individuals are not allowed, only official platforms. In the disposal process, all parties involved in the disposal of virtual currency (including judicial authorities, criminal suspects, defense lawyers, and buyers) should sign a written agreement beforehand to clarify the rights and obligations of each party, demonstrating the authority and responsibility of the judiciary.

The most important thing here is actually the consent of the criminal suspect to the disposal of their assets, which is crucial for sentencing.

Especially to comply with domestic trading prohibition policies, the agreement should require the buyer not to sell the judicially disposed virtual currency domestically.

Therefore, in judicial disposal, those that flow out to intermediaries are most likely just boasting.

Pay attention to the Fast Chain Legal Consultation Team, understand the legal regulations of the encryption circle, stay away from illegal crimes, take fewer detours, and consult on issues such as bank card judicial freezes, two-card penalties appeals, coin merchant OTC, and secure U transactions. Welcome to inquire.

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