With the rapid development of blockchain technology, virtual currencies (especially mainstream virtual currencies such as Bitcoin and Ethereum) have gradually become an important part of the global financial system. However, due to its anonymity and decentralization, virtual currencies are also widely used in illegal activities such as money laundering, pyramid schemes, casinos, fraud, illegal fundraising, etc.

In recent years, the number of criminal cases involving virtual currency has increased significantly. When handling such cases, judicial authorities are faced with an important issue: how to effectively handle the virtual currency involved in the case (i.e., dispose of the seized virtual currency and convert it into RMB). The judicial disposal of virtual currency not only involves technical operations, but also involves the definition of legal entities, especially who should be the subject of the entrusted disposal. This issue is directly related to the legality and efficiency of the disposal procedure and the protection of the rights and interests of the relevant parties.

1. Current Status of Judicial Disposal of Virtual Currency

According to current judicial practice, in general, the judicial disposal of virtual currency is still in the exploratory stage, and there is no unified solution to some compliance issues. For example, the following practical problems:

First, the anonymity and cross-border liquidity of virtual currencies make them difficult to track and seize;

Second, the value of virtual currency fluctuates violently, and how to dispose of it when its value is maximized is a technical challenge;

Third, the disposal of virtual currency involves the interests of multiple parties, including suspects, their families, victims, and judicial authorities. How to balance the interests of all parties and determine the entity entrusted with the disposal has become one of the core issues in judicial practice.

2. How to determine the entity entrusted with judicial disposal?

In the judicial disposal of virtual currency, the determination of the entrusted subject is the key to the legitimacy and efficiency of the procedure. The entrusted subject refers to the subject that has the right to decide the disposal method of virtual currency, and its choice directly affects the fairness and enforceability of the disposal result. At present, there are mainly the following views on the determination of the entrusted subject:

1. Suspect as the entrusting party

One view is that virtual currency, as property illegally obtained by the suspect, should be entrusted by the suspect himself, who has the right to choose the disposal method of his property (even if it is illegally obtained). However, this view has obvious limitations. First, in criminal cases, the suspect may be in custody, and it is difficult for him to effectively exercise the power of entrustment without the permission of the judicial authority; second, the suspect may deliberately delay or hinder the disposal of virtual currency in order to evade legal responsibility, thereby affecting the smooth progress of the judicial process.

(II) Suspect’s family members as the entrusting party

Another view is that in some special circumstances (such as when the suspect flees abroad or fails to return to justice for other reasons), the suspect's family can serve as the entrusting party. The basis for this view is that the family may be more familiar with the suspect's property status and can better cooperate with the judicial authorities to complete the disposal procedures. However, this view also has problems. First, the family may have a conflict of interest with the case. For example, when it comes to the distribution of family property, the family may tend to protect their own interests rather than cooperate with the judicial process; second, the family may lack understanding of virtual currency technology and find it difficult to effectively complete the disposal operation; most importantly, there is currently no legal basis for family entrustment.

(III) Judicial organs as entrusting entities

The third view is that the judicial organ should be the entrusting entity. The legal basis for this view is that the judicial organ is neutral and authoritative in criminal cases and can ensure the fairness and efficiency of the disposal procedure. In terms of specific legal provisions, the Interpretation of the Criminal Procedure Law of my country, the departmental regulations of the Ministry of Public Security, and the provisions of the Supreme People's Procuratorate on property involved in cases all determine that the judicial organ is the subject of the disposal of property involved in the case.

However, due to the special properties of virtual currency, according to the provisions of the "9.24 Notice", currently no domestic institution may engage in the exchange of virtual currency and legal currency. As a result, the judicial authorities, as the entrusting entity, complete the disposal of virtual currency by entrusting a professional third-party institution (domestic virtual currency disposal company). In addition, in terms of disposal time, the judicial authorities can also flexibly choose the disposal time according to the specific circumstances of the case to maximize the value of virtual currency and protect the legitimate rights and interests of the victims.

However, Lawyer Liu would like to remind you that during the handling of the case by the judicial organs, if the public security organs handle it first (that is, when the criminal case has not been judged or the judgment result has not yet taken effect), it is necessary to obtain the consent and cooperation of the suspect before handling it; the handling after the court judgment (in current practice, it is still entrusted by the public security organs) can be handled only according to the judgment result, without obtaining the consent or cooperation of the suspect/defendant.

3. Final Thoughts

The judicial disposal of virtual currency is an important part of criminal cases involving virtual currency. It is not only related to the smooth handling of the case, but also to the protection of the rights and interests of suspects and even victims and the realization of social fairness and justice. In the current judicial disposal, there are some phenomena that damage the legitimate rights and interests of suspects or victims, such as the opacity of the disposal process.

In the future, with the continuous development of virtual currency technology and the gradual improvement of the legal system, the judicial disposal of virtual currency will face more opportunities and challenges. On the one hand, judicial organs need to strengthen their study and research on virtual currency technology and improve their disposal capabilities; on the other hand, legislative organs or relevant regulatory authorities need to further improve relevant laws and regulations, industry regulatory policies, and clarify the procedures and standards for the judicial disposal of virtual currency. In addition, it is also necessary to strengthen international cooperation to jointly deal with the legal and technical difficulties brought about by the cross-border flow of virtual currency.

In short, the judicial disposal of virtual currency is a complex and important topic. Only under the multiple guarantees of laws, regulations, technology and international cooperation can its fair, efficient and legal goals be achieved.