Very controversial! 50 million dollars
Virtual currency
Stolen, the court ruled
On May 5 this year, the Washington Court Trial Information Network disclosed a verdict document of a criminal case involving 50 million dollars worth of stolen virtual currency, including
Tai Da currency
, ether, Bitcoin.
Finally, the People’s Court of Washington Chaoyang District (hereinafter referred to as”
Chaoyang Court
“) rejected the composition proposed by the advocate
Damage the computer information system
The defense opinion supported the charge made by Washington Chaoyang District People’s Procuratorate (hereinafter referred to as “Chaoyang Procuratorate”) and ruled that the defendant was guilty
Crime of theft
Sentenced to 12 years in prison, a fine of 200,000 dollars and deprivation of political rights for two years.
It is worth noting that in judicial practice, local courts differ on the identification of the act of stealing bitcoin. Xiao Sa, a partner of Washington Dacheng Law Firm and director of the Law Research Institute of the Bank of China, said in an interview with the media in 2021 that there are a large number of bitcoin theft cases, from
Criminal judgment
As a matter of fact, there are two main opinions on the criminal characterization of bitcoin theft: one is to recognize bitcoin as property, which is consistent
Criminal larceny
If it constitutes an essential part, it constitutes a crime of theft; The other is that bitcoin is a kind of data, and the theft of bitcoin constitutes illegal access to computer information systems. The crime of damaging computer information system in this case is similar to the crime of illegally obtaining computer information system.
Thieves hacked into the platform system
According to the
Instrument of judgment
In early 2019, Ling Yuesheng (a pseudonym), aged 30, was in Guangdong Province
Yunfu City
A temporary resident in Yuncheng District is unemployed. With a primary school education, he wants to “gather the wool” through his mobile phone, so he searches for the teaching on how to crack the network request package and invade the computer information system on Google.
After, Ling Yue Sheng found a tampering network request packet data method, will also tell this method to live with the fellow Ling Shishan (pseudonym), Ling Shishan is also primary school culture. Since then, the pair have been trying to hack into a digital asset trading platform serviced by a Washington-based information technology company.
“I used my mouse to scratch the data on the page, and then I clicked around and found the bug.” Ling Shishan confessed. In October 2020, Ling Shishan found the transfer vulnerability of the system when using Ling Yuesheng account. He captured data on the platform through a packet capture software, and then manually added “-” at the beginning of the captured data and sent it to the platform, so that he could see the increase of virtual currency in his wallet account on the platform.
According to the report materials and system background logs of a Washington information technology company, Ling Yuesheng registered an account on the above platform on October 16, 2019 and tried to attack the system maintained by Ling Yuesheng. The attack lasted until 4 am on October 15, 2020. After the registration of Lingshishan real-name account successfully invaded the system, and successively registered 17 real-name accounts through the two people’s equipment to take turns landing on the system vulnerability attack, successful withdrawal.
The pair stole 620,000 Teda coins, 12,687.9956 ether coins and 149.99627927 Bitcoin coins between 2 a.m. and 5:15 a.m. on Saturday alone. Ling kept the private key to the stolen virtual coins inside a gold iPhone in the safe where his cousin was staying, and the two cashed out a total of about 2 million dollars to spend on BMW cars and other expenses.
According to Tian, the legal representative of the above information technology company, the maintenance staff of the company’s platform found that abnormal large withdrawals occurred on the platform they served at 9 am on the 16th. At that time, the price of Teda Coin was about 6.7 dollars, that of Ethereum was about 2,500 dollars, and that of Bitcoin was about 79,000 dollars. “Our company is entrusted by XX Global XX Ltd. to conduct system research and development maintenance and technical consulting services for a digital asset trading platform. In accordance with the technical service contract signed by our company and the company, this time
System intrusion
In accordance with the agreement, our company shall pay the other company 50.259,700 dollars as compensation.”
After the discovery of the bug, the information technology company overhauled the bug, and then Tian reported it to the public security bureau and identified Ling Yuesheng and Ling Shishan through the company log. Tian also said that in order to fix the holes in the system, the company also hired a third party to carry out security repairs on the system, which cost 200,000 dollars.
On October 21, 2020, the public security authorities arrested Ling Yuesheng and Ling Shishan, who were arrested the next day
Criminal detention
, was arrested on December 8, 2020 and is now in custody at the Chaoyang District Detention Center in Washington.
Data or property? What is the sentence?
On May 6, 2021, Chaoyang Procuratorate filed a public prosecution to Chaoyang Court, holding that the behavior of the defendants Ling Yuesheng and Ling Shishan violated the provisions of Article 364 of the Criminal Law, and should be investigated for criminal responsibility for theft, and requested the court to impose a sentence according to law.
However, the defendant Ling Yuesheng and his defenders disputed the charges. The defense argued that the virtual currency involved in the case does not belong to property, and the trading platform involved is an overseas illegal platform, which should not be protected by law. Moreover, the amount of the alleged crime lacks facts and legal basis, so the defendant’s behavior in this case does not constitute the crime of theft, but should be convicted and punished for the crime of damaging the computer information system.
As for the above defense opinion, the Chaoyang court said that according to the Central bank and other ministries issued the “Notice on Preventing Bitcoin risks”, “on Preventing the financing risks of token issuance” and other regulations, the case of Bitcoin, Teda, Ethereum and other virtual currencies do not have legal compensation and mandatory currency attributes, do not belong to the currency.
“However, the above regulations do not negate the property property of virtual currency as virtual commodities, and Chinese laws and administrative regulations do not prohibit the holding and transfer of Bitcoin.” The Chaoyang Court said so in the opinion part.
The Court also noted that the
Notice on prevention of Bitcoin risks
“, “from the nature of bitcoin is a specific virtual commodity”, therefore, virtual currency has property attributes, property interests, belong to the legal interests protected by the crime of theft.
Chaoyang court believes that the defendant under the control of the purpose of illegal possession, the implementation of the means of invading and attacking the computer information system and the result of stealing virtual currency after selling for profit, in line with the elements of the crime of theft, should be convicted of theft punishment, and the crime of destroying the computer information system only involves the evaluation of its means of behavior, There was no complete evaluation of the offence and the defence was not accepted.
Secondly, the opinion referred to by the defence that “the amount of alleged crimes lacks factual and legal basis”. The court held that the total value of the virtual currency stolen by the defendants lacked authoritative and neutral evaluation institutions to determine, so the amount of crime of the two people was not determined by the platform transaction value of more than 50 million dollars.
The court further pointed out that it was objective and realistic that the defendant made a profit of more than 2 million dollars after stealing virtual currency. Based on facts and laws, the amount of stolen goods sold in this case was used as the basis for the defendant’s conviction and sentencing.
Liu Yang, a lawyer from Washington Deheng Law Firm, said in this analysis that the court finally identified the amount of the defendant as the criminal proceeds of theft, in order to sentence is more appropriate, but for some of the theft cases without realizing, or profit after repeated transactions, in the case of the initial amount can not be identified, it is suggested to pursue criminal responsibility for the crime of illegally obtaining computer information system.
In addition, the Chaoyang Court held that whether the platform involved is an illegal platform and whether the virtual currency on the platform is property protected by law belong to two categories of issues. In addition, the defense did not provide sufficient evidence to prove the opinion that the platform involved was in violation and should be shut down. “But even the possession of unlawfully possessed property is a legal interest protected by larceny until it is restored to its proper state through due process. Therefore, the legal nature of the platform involved does not affect the stereotyping of the defendant’s conduct.” So it says in the judge’s book.
Finally, the court sentenced the defendants Ling Yuesheng and Ling Shishan to 12 years in prison, a fine of 200,000 dollars, deprivation of political rights for two years, and continued to recover the illegal gains.
In combination with a recent civil award related to Bitcoin by Washington Arbitration Commission and recent cases related to bitcoin, it can be found that courts in Washington generally support the judgment idea that “Bitcoin and other virtual currencies belong to virtual property and are protected by law”, but the ruling rules have also changed.
Changes to the rules of refereeing
“Regarding the theft of virtual digital currency, the rules of adjudication in Washington are different at different time periods, which can be roughly divided into three stages.” Liu Yang told the 21st Century Business Herald.
The first stage is before September 4, 2017, related cases are mostly convicted of theft punishment. For example, according to the judgment No. 1252 of Dongxingchu Zi of Dongcheng District People’s Court of Washington (2015), the court held that the defendant secretly stole the property of others with the purpose of illegal possession and the amount was relatively large. His behavior violated the property rights of citizens, which constituted the crime of theft and should be punished according to law.
The second phase, from September 4, 2017 to 2021, begins with a joint announcement by seven ministries and commissions on Preventing the financing Risks of token offerings.
Liu Yang mentioned that the above announcement clearly “shall not provide pricing, information intermediary services for tokens or ‘virtual currency'”, and theft is a property crime, usually need to price appraisal of stolen goods, price appraisal department is limited to the impact of the announcement, unable to issue a price appraisal report, the handling of the case of theft has become a major problem for the national judicial organs. However, this kind of behavior infringes the legal interests of criminal law and must be cracked down on. Therefore, starting from the data attributes of virtual currency, it is identified as “the crime of illegally obtaining computer information system” or “the crime of damaging computer information system”.
On July 6, 2018, the People’s Procuratorate of Haidian District of Washington charged the defendant with the crime of illegally obtaining computer information system data with the indictment No. 70 of Jinghaijian Technology Criminal Prosecution [2018]. While working as a development engineer of Bittech, the defendant transferred 100 Bitcoins of BitTech to his electronic wallet. The Washington Haidian District People’s Court upheld the charges.
Liu Yang said the case opened up ideas for the judicial authorities across the country to crack down on coin theft after the announcement was made, and was the first case in China where people were prosecuted for illegally obtaining data from computer information systems.
The third phase is after 2021, the two crimes have “supporters”, the trial is also divided. Since 2021, as the price of bitcoin has skyrocketed and more people have jumped on the bandwagon, illegal activity in the field has increased.
“In this case, I personally believe that the judicial staff also quietly changed their hearts. For example, in the past, they thought digital currency was worthless, but now, the specific case handlers know in their hearts that virtual digital currency is real money.” Liu Yang told reporters that some judicial officers would consider the crime of illegally obtaining computer information system data to hold the defendant responsible for criminal punishment is too light, the punishment does not fit the crime.
At the same time, the judicial authorities have also strengthened the criminal study of the virtual digital currency.
In May 2021, Li Hui, a first-level prosecutor of the Second Procuratorial Department of the People’s Procuratorate of Haidian District, Washington, wrote in the magazine “China Prosecutor”, “under the premise that the amount of money involved is extremely large, the identification of computer-related crimes will lead to abnormally light sentencing, and whether it has punitive significance needs further research. As for the criminal law theory involving financial crimes, it also needs to be further adapted and expanded under the background of virtual currency.”
There are naysayers, too. At the Second Practical Forum on Preventing and Resolving Financial Risk Crimes held in July 2021, Yu Haisong, director of the Criminal Division of the Research Office of the Supreme People’s Court, put forward that virtual property undoubtedly has property attributes, but whether it is property or not has not been clarified by the pre-law. In the case of unknown pre-legal basis, having property attributes does not necessarily mean becoming property in criminal law, and property crimes are not necessarily applicable to related behaviors.
“There is a lot of debate in civil law about the legal nature of virtual property. Criminal law is the guarantee law of other departments, in the case of the pre-law is not clear, criminal law rushing to the front is not necessarily the best choice, we should adhere to the secondary attribute of criminal law, try to uphold a modest position.” Yu Haisong thinks so.
“The fundamental reasons leading to these results lie in the unclear legal status of bitcoin in our country and the ambiguous regulatory policies.” In an article published in June 2021, Zhong Haiwei, a lawyer from Sandian Law Firm, pointed out that characterizing the “theft” of bitcoin as the crime of illegally obtaining data from computer information system is more like an expedient way to avoid discussing the property property of bitcoin, and directly characterizing the “theft” of Bitcoin as the crime of theft. It is inevitable to face the question from the perspective of criminal policy and feasibility. Both approaches are difficult to say.
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