Legal Status of Virtual Money: A Look at the Criminal Protection of Encryption Assets from a Bitcoin Robbery Case

In recent years, with the development of blockchain technology, cryptocurrencies such as Bitcoin, Ethereum, and Tether have gradually become known to the public. Although these assets are represented as codes and data, they inherently possess property attributes due to their value, transferability, and exclusivity. In China, although relevant regulations prohibit the use of virtual money as legal tender or speculation, judicial practice has generally recognized their status as "specific virtual goods" or "data-based property."

In the field of criminal justice, cases involving virtual money are increasingly common, mainly involving types such as fraud, theft, and computer crimes. However, robbery cases that directly obtain virtual money through violence or threats are relatively rare. A Bitcoin robbery case that occurred in Yichun, Jiangxi in 2021 ((2022) Gan 09 Criminal Final No. 9) has become a typical case in judicial practice due to its particularity and complexity, providing important reference for the qualification and sentencing of virtual money in criminal cases.

Case Overview: An Attempted Bitcoin Robbery Plan

In May 2021, due to losses from trading coins, a person named Lai learned that Teacher Peng held at least 5 Bitcoins (which were priced around 255,000 RMB at the time) and developed the idea of robbery. He posted online looking for accomplices and got in touch with someone. The two met in Yichun and checked into a hotel, where they devised a detailed robbery plan.

To carry out the robbery, Lai prepared nylon ties and attempted to contact more accomplices. However, based on the clues, the police arrested the two on the spot on the afternoon of May 11, and the criminal plan was terminated before it could be implemented.

The first-instance court found that the two constituted robbery and sentenced Lai to three years and Xiang to one year in prison. The second-instance court, however, believed that this case belonged to the preparatory stage of robbery, which did not cause actual property loss and did not make a reasonable determination of the value of Bitcoin; therefore, it revised Lai's sentence to one year and six months and Xiang's to nine months, significantly reducing the prison terms.

The Legal Qualification of Robbing Bitcoin

The key point of contention in this case is: does robbing Bitcoin constitute robbery in the sense of the Criminal Law? The effective judgment of the court provides an affirmative answer.

Although Bitcoin is essentially a string of encrypted data, it meets the characteristics of "general property" due to its exchangeability, transferability, and real market value. The appellate court cited relevant departmental regulations, stating that Bitcoin belongs to "specific virtual goods." While it does not possess the status of currency, it still falls under the category of "data property" that should be protected by law.

Therefore, robbing Bitcoin is essentially no different from traditional robbery of cash or physical goods, as it equally infringes on the property interests of others. In this case, although Lai and others did not actually carry out the robbery, their actions of preparing zip ties and formulating detailed plans already constitute the preparatory crime of robbery.

Sentencing Considerations for Virtual Money Crimes

In cases involving virtual money crimes, the key to sentencing lies in how to determine the "property value". In this case, the first-instance court based its judgment on the market price of Bitcoin at the time of the incident, recognizing it as "particularly huge amount" and imposed a heavier sentence. However, the second-instance court held a different viewpoint:

1. The case has not entered the implementation stage and no property has been actually obtained.
2. Bitcoin has no legal trading market in the country, and the price determination lacks clear standards.
3. The conviction for robbery should be based on the "actual amount robbed," as it is difficult to accurately determine the value during the planning stage.

The second-instance court pointed out that the valuation of encryption assets should follow the "loss compensation" principle, with the actual loss of the victim as the core basis, mainly referring to the following factors:

• Purchase Price of the Victim (Priority Applicable)
• Price on the exchange at the time of the incident
• Disposal price (if any)

The court emphasized that although our country does not recognize the monetary status of Bitcoin, it has not prohibited private ownership and transfer. The legal ownership of virtual assets by victims should be protected by law.

In the end, the second-instance court did not impose a heavier penalty for robbery "of a huge amount," but instead made a relatively lenient judgment for the two defendants by comprehensively considering the harmfulness, means, and actual risks during the preparatory stage of the robbery.

Conclusion: Future Prospects for Legal Protection of Encryption Assets

The ruling in this case not only provides guidance for cases involving robbery of virtual money, but also clearly states that the property nature of virtual money has been widely recognized by Chinese criminal law practice.

Under the current legal framework, while Bitcoin and other encryption assets do not possess monetary attributes, they have significant property value. Regardless of the means used to infringe upon such assets, as long as the perpetrator intends to illegally possess them, it will be treated as a property crime.

With the in-depth development of the digital economy, criminal cases involving encryption assets will become more diverse, and judicial authorities will face more new challenges. In the future, the law should further clarify the legal attributes of Virtual Money, market valuation standards, and the boundaries between data and property, establishing more unified and stable judicial adjudication rules. Legal practitioners in the web3 field also need to continuously enhance their professional knowledge to better serve their clients.

It is foreseeable that encryption assets will gain more legal recognition and protection, and any actions that infringe on the legitimate rights and interests of their holders will also be severely pursued.