introduction

In recent years, with the development of blockchain technology, cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), and Tether (USDT) have become more and more well-known. Although these assets are manifested as "code" and "data", the value, transferability and exclusivity they contain make them naturally have property attributes. In China, according to the "9.4 Announcement" in 2017 and the "9.24 Notice" in 2021, it is clearly prohibited to circulate and use virtual currencies as legal tender; at the same time, it is also clearly prohibited to speculate on virtual currencies. However, in judicial practice, virtual currencies have been widely recognized as "specific virtual commodities" or "data-based properties."

In the field of criminal justice, the number of cases where virtual currency has become the object of crime and a tool of crime has increased year by year, with the most common types of crimes being fraud, theft, and computer crimes. However, "robbery cases" that directly attempt to obtain virtual currency by violence or coercion are not common (there are relatively more extortion crimes involving currency). Therefore, the 2021 Bitcoin robbery case of Lai and Xiang in Yichun, Jiangxi ((2022) Gan 09 Criminal Final No. 9) has become a typical example in judicial practice due to its special circumstances, complex characterization, and strong controversy. It also provides a good reference for how to characterize and sentence crypto assets in criminal cases.

1. Case introduction: From "recruiting people on Tieba" to being arrested in a hotel, a failed Bitcoin robbery plan

According to the information disclosed in the court judgment, the case originated from Lai's losses from cryptocurrency trading. In May 2021, Lai learned that Mr. Peng held at least 5 bitcoins (the unit price was about 255,000 yuan at the time), and he had the idea of "getting a few coins" by robbery. Fearing that he could not control the other party when committing the crime alone, Lai chose to post a post on Baidu Tieba to recruit "heroes" from all over the world to work together.

After seeing the message, Xiang contacted Lai. The two chatted privately through the "Bat" chat software. Lai told him the robbery plan in detail and promised to share 0.8 bitcoins with him after the success. Xiang then took the high-speed rail from Changsha to Yichun, met with Lai and checked into the hotel. The two made a detailed plan in the room, planning to gather at least 4 people. Lai invited Mr. Peng to a remote area on the pretext of "investment". One person drove to pick him up, and the other three used nylon cable ties to control Mr. Peng and his companions, and then asked for the Bitcoin account and password.

In preparation for the robbery, Lai even picked up seven nylon cable ties near the hotel. He also kept contacting netizens with robbery intentions, such as "Magic Cube", "Hunjianglong Decepticon", and "Peach", trying to gather enough people to commit the crime. However, before his accomplices arrived, the police had locked their locations based on clues and arrested the two on the spot on the afternoon of May 11, and the criminal plan was terminated before it was even implemented.

The first instance court found the two guilty of robbery and sentenced Lai to three years in prison and Xiang to one year in prison, respectively, and imposed fines. However, the two appealed. The second instance court held that the case was in the preparatory stage of robbery , did not cause actual property loss, and did not make a reasonable determination of the value of Bitcoin, so Lai was sentenced to one year and six months and Xiang to nine months, which significantly shortened the sentences.

2. Does robbing Bitcoin constitute robbery?

An important point of contention in this case is: Can the robbery of Bitcoin constitute "robbery" in the sense of the Criminal Law?

The court’s effective judgment gave a clear answer - constitution.

Robbery in the Criminal Law refers to the act of robbing public or private property by means of violence, coercion, etc. Although Bitcoin is essentially a string of encrypted data based on blockchain technology, it has the characteristics of exchangeability, transferability and real market value, which meets the three characteristics of "broad sense property": management possibility, transferability and value.

The Yichun Intermediate Court (i.e. the second instance court) cited the 2013 "Notice on Preventing Bitcoin Risks" issued by the central bank and other departments, and believed that Bitcoin is a "specific virtual commodity" that does not have currency status, but is still a "data-based property" that should be protected by law. Therefore, robbing Bitcoin does not lose the elements of property crime because it is in the form of data. The object of the infringement is still the property interests of others, which is no different from the traditional robbery of cash or mobile phones.

Although Lai and others did not start to carry out the robbery in this case, their behavior was criminal preparation, because the two defendants had prepared ties and made a detailed robbery plan, which constituted the crime of robbery in the Criminal Law. Combined with the Supreme People's Court's "Guiding Opinions on Several Issues Concerning the Application of Law in the Trial of Robbery Cases" and other regulations, the court finally determined that their behavior constituted robbery, but reduced the punishment.

III. Sentencing rules for crimes involving virtual currency: The key lies in the determination of “property value”

When sentencing for robbery, in addition to the behavior, the size of the "robbery amount" must also be considered. How to value the robbed crypto assets is one of the difficulties in judicial practice.

The court of first instance, based on the instant market price of Bitcoin at the time of the incident (about 255,000 yuan per coin), believed that the two intended to rob at least one coin, and therefore the amount was "particularly large", and thus imposed a heavier sentence. However, the court of second instance held that: first, the case had not entered the "implementation stage" and no property was actually obtained; second, there was no legal trading market for Bitcoin in China, and there was no clear standard for determining the price; third, the conviction of robbery should be based on the "actual amount robbed", and the value could not be accurately defined at the stage of premeditated robbery.

The second-instance court pointed out that the value of crypto assets such as virtual currency should follow the principle of "loss compensation", that is, the actual loss of the victim should be taken as the core basis , mainly referring to the following factors:

(1) Purchase price of the victim : This shall be applied first and can best reflect the victim’s loss.

(ii) Price on the trading platform at the time of the incident : If there is no purchase record, the real-time price on the foreign platform at the time of the infringement may be used as a reference.

(3) Selling price of stolen goods : if available, it can also serve as auxiliary basis.

At the same time, the court emphasized that although China does not recognize Bitcoin as a currency, it does not prohibit private holding and transfer. Therefore, the victim's holding of virtual assets is legal, and his losses should be protected according to law.

Ultimately, the second-instance court decided not to increase the punishment due to the "huge amount" of robbery, but instead made a relatively lenient sentence for the two defendants based on the harmfulness, means and actual risks of the preparatory stage of the robbery. This to a certain extent also demonstrated the rationality and prudence of the judicial organs in new types of property crime cases.

IV. Conclusion: The future of legal protection of crypto assets

The judgment in this case not only provides exemplary guidance for virtual currency robbery cases, but also sends a clear signal: the property attributes of virtual currency have been widely recognized in China's criminal law practice.

Under the current legal framework, although crypto assets such as Bitcoin do not have monetary attributes, they have significant property value. Whether through fraud, theft, illegal control of computer systems, extortion, or violent robbery, as long as the perpetrator commits an infringement for the purpose of illegal possession, his or her behavior will be treated as a property crime.

As the digital economy develops, criminal cases involving crypto assets will become more diverse, and judicial organs will face more new types and new controversial challenges. In the future, laws should further clarify the legal attributes of virtual currencies, market valuation standards, and the boundaries between data and property, and establish more unified and stable judicial rules. Of course, web3 lawyers also need to learn more professional cryptographic knowledge in addition to law in order to better serve their clients.

It is foreseeable that crypto assets will be increasingly recognized and protected by law, and any behavior that infringes upon the legitimate rights and interests of its holders will be severely investigated in accordance with the law.