Special Declaration: This article is an original work by Attorney Shao Shiwei. It represents only the personal views of the author and does not constitute legal consultation or legal advice on specific matters. For article reprints, legal consultations, or professional exchanges, please add contact: sswls66.
This case begins with a criminal judgment from a Shanghai court, concerning conduct in the traditional gaming industry where an employee exploited work privileges to modify backend data and resell game currency for profit. Although game currency and crypto assets are not in the same category, given that the current judicial system lacks clear legislative guidance and established adjudication standards for Web3, virtual assets, and crypto asset crimes, case-handling personnel often use virtual property cases in the gaming industry as a basis for analogy to infer the legal nature of criminal cases in the Web3 field, the property nature of virtual assets, and the path for characterizing the conduct.
Therefore, when handling criminal cases involving crypto assets, the value for lawyers in studying criminal cases in the traditional gaming sector lies in better understanding the reasoning and judgment methods employed by case-handling personnel when dealing with virtual asset cases. This enables lawyers to know both their own position and that of the opposing side, formulate litigation strategies with greater targeting, and enhance the effectiveness of communication.
I. Author of this Article: Attorney Shao Shiwei
Case Introduction:
Happy Mutual Entertainment Company primarily engages in the development, publication, and operation of electronic games. The company cooperates with multiple game platforms to operate its developed electronic game "Arcade Three Kingdoms." Players of "Arcade Three Kingdoms" purchase the game currency "Yuanbao" from Happy Mutual Entertainment Company by funding and topping up their game accounts, using it to enhance game equipment, character attributes, and other features.
Shen Mou was engaged in game operation planning at Happy Mutual Entertainment Company. During his tenure, he utilized his game operation management authority to unauthorizedly modify backend data, adding "Arcade Three Kingdoms" game currency "Yuanbao" to the respective game accounts of multiple players, and collected payments totaling more than RMB 150,000.
Trial Proceedings:
The People's Procuratorate of Pudong New Area, Shanghai, alleged that Shen Mou's conduct constituted the crime of sabotaging computer information systems, with particularly serious consequences, warranting a fixed-term imprisonment of five years or more according to law. The court of first instance did not accept this allegation, instead finding him guilty of the crime of illegally obtaining data from computer information systems, and sentenced him to three years of fixed-term imprisonment.
The First Branch of the Shanghai Municipal People's Procuratorate filed a protest, arguing that Shen Mou constituted the crime of occupational embezzlement. Ultimately, the Shanghai No. 1 Intermediate People's Court sentenced Shen Mou to three years of fixed-term imprisonment for the crime of occupational embezzlement [Case No. (2020) Hu 01 Xing Zhong 519].
Attorney Shao's Analysis:
The facts of this case are not actually complex, but disputes arose regarding the application of charges because the case involved "game currency," a type of virtual currency.
The trial of criminal cases mainly revolves around two issues: one is qualitative characterization, i.e., what crime the perpetrator has committed; the other is sentencing, i.e., determining the amount involved in the case and imposing a corresponding term of imprisonment on the perpetrator based on the amount involved and other circumstances. In this case, the issues to be resolved are whether virtual currency constitutes "property" under Criminal Law, and how to determine the value/amount involved of the virtual currency.
01
What Crime Does the Employee's Conduct Constitutes?
The focal point of dispute between the judgments of the first and second instances in this case was whether the employee's conduct constituted occupational embezzlement or the crime of illegally obtaining data from computer information systems. Looking further, the core divergence between these two charges actually centers on the same question: whether the virtual currency (game currency) involved can be recognized as "property" in the sense of Criminal Law. Only under the premise that game currency is confirmed to have the attribute of property can the employee's act of utilizing authority to add new game currency and resell it potentially fall within the evaluative framework of the crime of occupational embezzlement.
The court of first instance held that the game currency in this case existed in the virtual space of the game "Arcade Three Kingdoms" and was merely electromagnetic records within the computer game program; thus, its essence belonged to computer information system data. However, the court of second instance rejected this view,holding that game currency constitutes "property" in property crimes, for the following reasons:
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Combining the provisions of the Civil Code, it affirmed the concept that game currency belongs to online virtual property, holding that "property" under Criminal Law is not limited to tangible objects but also includes intangible objects and proprietary interests.
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It held that game currency possesses economic value and practical utility. Operators need to invest manpower and material resources in developing and operating the game, and players need to pay consideration to purchase it, which is no different from ordinary commodities. Players purchase game currency to obtain game services provided by the operator, thereby satisfying personal spiritual needs.
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Although operators can continuously replicate game currency by modifying code, each unit of game currency exists independently. The perpetrator can exclude others' possession and establish a new possessory relationship, meeting the necessary conditions for establishing property crimes. If players' controlled game currency is recognized as property while simultaneously denying the property attribute of game currency controlled by the operator, it would result in different evaluations of the legal nature of the same item, undermining the unity of the concept of property.
However, in a case tried by the Tianhe District Court of Guangzhou in 2023 [Case No. (2023) Yue 0106 Xing Chu 748], the court presented a view completely different from that of the aforementioned Shanghai courts: While affirming the property attribute of game currency as virtual property, it further emphasized that having property attributes is not equivalent to conforming to "public or private property" in the sense of Criminal Law.
Basic Facts:
Chen Mou exploited a procedural loophole of a certain company,illegally obtained the virtual currency"Yuanbao" in the game involved for free, and then provided paid top-up services to other game players. In this case, whether the game currency involved could be recognized as "property" under Criminal Law determined whether Chen Mou's conduct was characterized as theft or as the crime of illegally obtaining data from computer information systems.
The court held:
Although game currency has use value and exchange value within the game space, the value of game currency is determined by the issuing entity itself, not by market transactions, and game currency cannot serve as a conventional medium of equivalent exchange in market economic activities.
Furthermore, the court held that, based on the data attribute of game currency, it actually possesses characteristics of being indestructible and non-perishable, and capable of batch replication and regeneration. After the perpetrator steals game currency from the game operator, it still exists on the game operator's servers; the game operator has not lost possession of the game currency and can fully achieve the purpose of recovering losses through self-help remedies such as banning accounts and rolling back data. Therefore, the aforementioned conduct also differs from ordinary theft.
Consequently, Chen Mou's conduct was characterized as the crime of illegally obtaining data from computer information systems.
Summary:
From the above two judgments, it can be seen that there are completely opposite judicial cognitions among different regions and courts on the question of whether virtual currencies in the category of game currency naturally belong to "public or private property" in the sense of Criminal Law.
The logic of the Shanghai courts emphasizes the realistic attributes of "player payment for purchase—virtual currency having consideration—ability for exclusive control—possessing economic value," thereby incorporating it into the property system of Criminal Law; whereas the Guangzhou case emphasizes technical-level features such as "infinite replicability—pricing not dependent on market supply and demand—operator's ability for self-help remedy," holding that although it is virtual property, it does not necessarily equate to property in the sense of Criminal Law.
The divergence between these two viewpoints essentially reflects whether judicial organs, when facing new types of criminal forms, base their judgment on traditional concepts of property rights or on technical controllability as the standard? Do they emphasize "economic substance" or "data attributes"? Currently, there is no nationwide unified adjudication standard.
For lawyers handling criminal cases in the Web3 field, this divergence holds significant practical value:
It allows us to recognize more clearly that in criminal cases involving new types of virtual assets such as crypto assets,the boundary between crime and non-crime, or between one crime and another, is not clearly demarcated, but rather involves a vast and arguable "gray area". For lawyers, this means we are not passively accepting the prosecution's logic of accusation, but can actively reshape the nature of the case.
Depending on the specific circumstances of the case, lawyers may choose to draw on the approach of the Shanghai courts, by proving that the assets involved have a real value basis (such as project development input costs, fair market value, proof of liquidity, etc.) andcharacteristics of exclusive control, steering the case toward “the track of "property crimes", or choose to apply the logic of the Guangzhou courts, striving to push the characterization of the case toward “"data crimes" or denying the necessity of protection based on regulatory policies。
The above content discusses whether virtual currency possesses the attribute of property in the sense of Criminal Law. In Part II of this article, we will continue to focus on another key issue: How should the amount involved be determined in criminal cases in the traditional gaming industry and the Web3 field? This issue directly relates to the application of charges and the range of sentencing, and is also the most disputed part in practice.
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