Original text: Jiang Anjie, All-Media Reporter of Legal Daily

To implement the spirit of the Third Plenary Session of the 20th Central Committee of the Communist Party, and to fully leverage the role of the rule of law in the modernization of the national governance system and governance capacity, a seminar on "Disposal of Involved Virtual Currencies" was held in Beijing on January 19, co-hosted by the Law School of Renmin University of China, the Criminal Law Science Research Center of Renmin University of China, and Beijing Zhongyin Law Firm. Nearly 60 participants attended the meeting, including representatives from practical departments such as the Legislative Affairs Commission of the Standing Committee of the National People's Congress, the Supreme People's Court, the Supreme People's Procuratorate, and the Ministry of Public Security, as well as scholars from the legal theory community, lawyers, and business representatives.

Current Status and Prospects of Legal Regulation of Virtual Currencies

The first session, "Current Status and Prospects of Legal Regulation of Virtual Currencies," was chaired by Cheng Lei, Vice 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, shared his views based on the development history of virtual currencies and the regulatory practices of various countries. He pointed out that emerging virtual assets such as virtual currencies and the legal issues involved are hot topics in international exchanges and should be a key focus in China's construction of foreign-related rule of law. In recent years, China's regulatory capacity and system for virtual currencies have made significant progress, with broad development prospects that warrant in-depth and comprehensive research.

Shi Yanan, Director of the Criminal Law Science Research Center of Renmin University of China, spoke on three aspects: the legal nature of virtual currencies, the construction of a regulatory system, and the overseas recovery of assets involved in virtual currency cases. He believes that in judicial practice, to facilitate case handling and simplify relevant procedural designs, virtual currencies should be regarded as general equivalents. The regulation of virtual currencies should consider their coordination with the regulatory system for legal currencies. Regarding the recovery of assets in cases involving virtual currencies, existing thinking should be transformed, focusing on the development and application of new legal tools based on the clear identification of virtual currencies as general equivalents.

Xue Haibin, Chief Legal Officer and Chief Compliance Officer of Hexagon Group in Greater China, shared his views on the definition of virtual currencies and related professional issues based on his overseas practice experience. He noted that virtual currencies are characterized by decentralization and anonymity. Currently, the total market value of mainstream virtual currencies has exceeded one hundred million US dollars, and they possess enormous development potential. Different countries have varying definitions of their nature, ranging from legal currency, legal payment methods, virtual goods, digital assets, financial products, to outright prohibition. China should dynamically focus on the positioning of virtual currencies from the perspectives of development, inclusiveness, and enhancing international competitiveness.

Ms. Yang Xia, Chairwoman of Chengdu Chain Security Technology Co., Ltd. and Associate Professor at the University of Electronic Science and Technology of China, summarized and shared her practical experience in investigating virtual currency crime cases, highlighting the main types of virtual currency crimes, the major issues in current regulatory provisions, and proposed relevant countermeasures.

Liu Xiaoyu, Chairman of the Management Committee and Senior Partner of Zhongyin Law Firm, reviewed the virtual currency regulatory policies of major countries and regions such as the United States, the European Union, and the United Kingdom, and summarized various viewpoints on the legal attributes of virtual currencies, including the theories of virtual property, digital goods, securities, and currency. He pointed out that discussions on virtual currency regulatory policies should not detach from the underlying blockchain technology. China's current "prohibition-based" regulation is not conducive to participating in the global Web 3.0 competition and hinders the development of the digital economy. Existing regulatory policies should be appropriately adjusted based on risk prevention.

Yu Haisong, Deputy Director of the Research Office of the Supreme People's Court, served as a discussant for this session. He pointed out that discussions on virtual currency issues in China must be based on current regulatory policies. At present, China's regulatory policies regarding virtual currencies are gradually becoming clearer. In practice, there is a real need for the disposal of involved virtual currencies, but how to dispose of them in accordance with current regulatory policies deserves further study. Overall, further standardization is needed for the disposal of involved virtual currencies:

• First, clarify the legal boundaries of disposal methods for virtual currencies at the policy level;
• Second, further optimize specific issues such as timing and procedures for disposal at the technical level.

Practical Challenges and Response Measures for Virtual Currency Disposal (I)

The second session, "Practical Challenges and Response Measures for Virtual Currency Disposal (I)," was chaired by Zhang Xiaojun, a member of the Management Committee and Senior Partner of Zhongyin Law Firm.

A relevant person in charge of the Property Management Division of the Legal Affairs Team of the Beijing Municipal Public Security Bureau pointed out that virtual currency crime has become an important manifestation of cybercrime, specifically divided into fraudulent behaviors under the guise of investing in virtual currencies, theft and fraud crimes targeting virtual currencies, and illegal trading activities using virtual currencies as tools. Due to the decentralized, anonymous, and transnational characteristics of virtual currencies, there are a series of law enforcement difficulties in practice, mainly including difficulties in qualification, evidence collection, custody, and disposal.

Guo Shuo, a professor at the Institute of Litigation Law of China University of Political Science and Law, illustrated different disposal schemes for virtual currencies by citing specific cases. He noted that the essential attributes of virtual currencies and related businesses currently lead to a lack of effective regulatory measures, resulting in significant disputes in judicial practice. He believes that attention should also be focused on issues such as the return of victims' property and virtual currency intermediary institutions.

Chen Shi, Vice Dean of the School of National Governance at Zhongnan University of Economics and Law, proposed that currently, virtual property is not legally predetermined, and there is a lack of legal basis for whether virtual currencies belong to criminally involved property. There is a trend of normalizing the prior disposal of involved virtual currencies in judicial practice, which does not comply with current legal provisions. The practice of entrusting third parties to dispose of and liquidate virtual currencies lacks legal regulation and poses risks of triggering new illegal activities. Therefore, the nature of involved virtual property, including virtual currencies, should be clarified, along with the disposal subjects, methods, procedures, requirements, standards, and legal responsibilities, to promote the legalization and standardization of the disposal of involved virtual property.

Liu Renqi, Vice Dean of the Criminal Law School of Northwest University of Political Science and Law, shared on the topic of "Rules for Victim Participation in the Disposal of Involved Virtual Currencies."

• On one hand, the current disposal methods for involved virtual currencies are primarily entrusted to third parties by public security organs, effectively excluding victims from participation;
• On the other hand, improving the pathways for victims to participate in virtual currency disposal can classify their participation based on whether they profit, with some disposals allowing victim participation needing to comply with legality rules, informed consent rules, agreement rules, public order and good customs rules, and maximization of interests rules.

Wang Tuo, head of the Financial Case Handling Group of the Fourth Procuratorial Office of the Supreme People's Procuratorate, and He Ting, Vice Dean and Professor at the Criminal Law Science Research Institute of Beijing Normal University, participated in the discussion. Wang Tuo believes that:

• First, we must face history and reality, and cannot ignore the decisive role of regulatory documents in curbing speculative behaviors in virtual currencies, while accelerating top-level design to address various issues related to virtual currency crimes.
• Second, we need to strengthen the coordination between criminal justice and administrative regulation, adhering to the principle of unified legal order.
• Third, we should strive to reach a consensus on the nature of virtual currencies, especially ensuring that civil and criminal identifications do not contradict each other.
• Fourth, we need to establish scientifically reasonable procedural norms to prevent various risks in judicial disposal.
• Fifth, we should emphasize the complementary relationship between technology and case handling.

He Ting proposed that the disposal of virtual currencies should focus on resolving issues related to their qualification, classification, regulation, and procedural norms. Virtual currencies do not belong to prohibited items and can be treated as objects of property crimes, allowing for the possibility of regulating their disposal as a special type of involved property. It is necessary to distinguish between different categories and roles of virtual currencies in various types of crimes, and to adopt different disposal pathways, ensuring effective interaction between technology and legal norms to regulate the disposal of involved virtual currencies, while adhering to the requirements of substantive fairness and justice.

Practical Challenges and Response Measures for Virtual Currency Disposal (II)

The third session, "Practical Challenges and Response Measures for Virtual Currency Disposal (II)," was chaired by Li Zheng, Secretary of the Party Committee and Senior Partner of Zhongyin Law Firm.

Dong Kun, a researcher at the Institute of Law of the Chinese Academy of Social Sciences, pointed out that the compulsory disposal of property is usually viewed as evidence preservation rather than property preservation, but evidence preservation may obscure property attributes, leading to issues such as prior evidence disposal and infringement of property rights. Currently, there are no clear legal provisions for the disposal of virtual currencies, but the disposal methods in practice, especially the entrustment of third parties, not only involve legality issues but may also lead to serious consequences such as illegal inflow of funds and long-arm jurisdiction. Moreover, the overall participation of citizens in the disposal process is low, necessitating further legal improvements. Additionally, the prior disposal of virtual currencies presents a paradox, requiring a balance between national losses and the rights of the parties involved, ensuring that the final disposal complies with litigation rules.

Zhu Tonghui, Associate Professor at the Law School of Nankai University, stated that although current laws strictly limit the disposal of virtual currencies, some companies are still exploring legal disposal pathways. He shared four major methods for proving the connection between virtual currencies and the property of suspects: electronic evidence identification technology, judicial evidence collection, remote inspections, and bidirectional association technology.

Nie Youlun, Associate Professor at the Law School of East China Normal University, 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 the intervention of property rights, which should have legal reservation applicability. However, since the criminal procedure law does not provide regulations, it is necessary to address the basis issue at the legislative level, clarifying specific bases, relevant measures, and ensuring compliance with the principle of proportionality.

Guo Zhihao, a partner at the global headquarters of Yingke Law Firm, believes that the primary challenge in the disposal of virtual currencies is the ambiguity in their definition and scope of application, leading law enforcement agencies to often confuse blockchain-based virtual currencies with ordinary virtual currencies. He proposed that virtual currencies have dual legal attributes: one is the property attribute of network assets, and the other is that some virtual currencies have securities attributes, necessitating differentiation based on different types of virtual currencies.

Li Wei, Associate Professor at the Law School of Central University of Finance and Economics, and Zhang Yuxiang, an official from the Criminal Law Office of the Legislative Affairs Commission of the Standing Committee of the National People's Congress, participated in the discussion. Li Wei believes that the issue of "disposal of virtual currencies" should be explored from the perspective of objects rather than currency, as viewing it from the perspective of objects or assets can avoid entanglements regarding its legality, thereby constructing relevant rules for preservation and disposal. Within the current regulatory framework, disposal can be unified through collaboration between judicial and financial departments, such as through confiscation to become state-owned assets, then establishing central or local platforms or setting up overseas asset management departments, and effectively disposing of assets through financial instruments. Considering the national strategy for digital assets in the future, blockchain-based data assets could be managed as restricted circulation items.

Zhang Yuxiang believes that in practice, judicial authorities face certain difficulties in disposing of involved virtual currencies, indicating a demand for policy and institutional supply. There are still some differing understandings regarding virtual currencies, including their legal attributes, disposal procedures, custody, etc., which we are closely monitoring and studying. Improving the system of compulsory measures such as sealing, seizing, and freezing, as well as the system for disposing of involved property, is a significant issue for the improvement of the criminal procedure system. How to dispose of involved virtual currencies is also one of the important issues, and we will continue to follow up on relevant policies, judicial practices, and opinions from various parties, promoting the timely improvement of relevant systems.

Proof and Identification of Virtual Currencies

The fourth session, "Proof and Identification of Virtual Currencies," was chaired by Zheng Jia, a partner at Zhongyin Law Firm.

Gao Tong, a professor at the Law School of Nankai University, believes that proving virtual currencies is challenging mainly due to the weak direct correlation between virtual currencies and criminal facts, the cross-border factors in the flow of money, making it difficult to trace the complete flow of funds, and the difficulty in determining the amount of crime and the suspect's subjective intent. Therefore, the key to proving virtual currencies lies in establishing a sound proof mechanism for involved virtual currencies:

• Strengthen the evidential foundation for involved virtual property, utilizing advanced technologies such as blockchain analysis tools for tracking, and collaborating across departments with cryptocurrency organizations, tax authorities, banks, etc.;
• Enhance the review of the fund flow process between legal currencies and virtual currencies; employ diverse evidence chain analysis using confessions, electronic data, transaction records, and the professional technical means of third-party institutions;
• Simplify the proof model for cybercrime facts, comprehensively identify involved virtual currencies, and differentiate their litigation value by adopting different standards of proof. For instance, virtual currencies used as the basis for conviction and sentencing must meet a standard of being truly sufficient, while the proof standard for the disposal of involved property can meet the preponderance of evidence standard.

Liu Yang, a senior partner at DeHeng Law Firm, stated that the actions of judicial authorities in disposing of virtual digital currencies are legitimate, and judicial authorities can entrust professional institutions to handle virtual currencies. Lawyer Liu suggested that state-owned banks serve as the asset disposal entities. State-owned banks themselves bear the financial burden and have overseas branches, which can ensure the security of assets during the disposal of virtual currencies.

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

• First, there are issues related to criminal law and procedural law, including the criminal jurisdiction of the case and the criminal procedural actions such as sealing, freezing, and seizing. Therefore, detailed legislative provisions are needed for the jurisdictional connections in such cases.
• Second, it should be considered whether issues related to virtual currencies can be linked to China's data security laws and regulations, utilizing existing data security provisions to implement temporary measures;
• Alternatively, limited cooperation agreements could be signed with other countries to jointly handle cross-border virtual currency cases.

Wang Yijue, a lecturer at the Law School of Beijing Jiaotong University, proposed that the current disposal of criminally involved virtual currencies faces dual dilemmas of technology and law. The former has made significant progress with advancements in investigative technology, while the latter faces challenges in optimizing the interpretation of relevant criminal legal provisions under existing regulatory policies.

Gao Xiansong, Director of the Information Security Emergency Response and Disposal Center of the Beijing Internet Industry Association, and Chen Jianjun, a lecturer at the Criminal Law School of Northwest University of Political Science and Law, participated in the discussion. Gao Xiansong noted that illegal activities such as gambling, illegal fundraising, fraud, pyramid schemes, and money laundering generate a large amount of involved virtual currencies, which has also led to the emergence of numerous virtual currency disposal companies. The methods for disposing of virtual currencies, such as directly hedging domestic and foreign funds, cannot be fully legal and compliant, from the disposal means to the collection of service fees. Currently, the difficulty in sealing and controlling virtual currencies lies in the lack of smooth official channels and an over-reliance on third-party disposal companies.

Chen Jianjun emphasized that legislation should first clarify the nature of virtual currencies, specifically that virtual currencies belong to virtual property. Regarding the investigation of virtual currencies, on one hand, there should be an enhancement of technical means and international technical exchanges and cooperation; on the other hand, for cases involving virtual assets, the existing relatively mature leniency system for confession and plea bargaining could be flexibly applied to encourage suspects to voluntarily confess to involved property or provide potential, more significant clues regarding virtual currency crimes, thereby alleviating the pressure on public security and judicial authorities in tracking and proving virtual currencies. Additionally, the identification of the facts of conviction and sentencing related to virtual currencies could also be achieved by updating the connotation of confession and plea bargaining.

Cheng Lei and Li Zheng provided a summary. The experts present deeply discussed the disposal of involved virtual currencies from multiple dimensions, covering the concepts of virtual currencies, their legal attributes, the current status of foreign legislation, and disposal practices in various regions. However, there are currently issues in China's disposal process for virtual currencies, such as imperfect legislation and a lack of interpretative space in the law, which result in significant legal risks and practical difficulties in the disposal of virtual currencies. As an emerging asset class, virtual currencies urgently need legislative improvement to ensure their legality and security, while also enhancing cross-national cooperation and regulatory strength to provide practical legal guarantees for the standardized disposal of involved virtual currencies.

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。