Attorney Shao Shiwei | From Game Coins to Cryptocurrencies: Paths for Applying Criminal Charges and Disputes over Amount Determination in Virtual Asset Cases (Part II)

In this articlePart Iwe discussed whether virtual currencies possess the attribute of “property” within the meaning of criminal law. This article continues the discussion by examining how the amount in controversy should be determined in criminal cases arising in the traditional gaming industry and the Web3 space.

How should the amount in controversy in this case be determined?

In the Shanghai case, when determining the sentencing range for the defendant, the court neither directly adopted the listed price of the in-game currency nor simply relied on the price at which the actor actually sold it. Instead, the court comprehensively considered multiple factors. The approach taken in this case offers significant reference value for lawyers handling criminal cases involving cryptocurrencies. In light of this, Attorney Shao further analyzes the issues related to the determination of amounts, drawing on the reasoning in this case and his own practical experience.

First,The court held that there is a weak correlation between the pricing of in-game currency and its cost. Unlike tangible goods, in-game currency, as virtual property, can be sold indefinitely after a single production run. Once the game system is built, the game operator needs only to modify a small amount of code within the system to produce in-game currency without limit. Although Shen priced the in-game currency he improperly added and created at RMB 1 million, he merely engaged in simple data modification, incurring virtually no cost.

In the field of cryptocurrencies,There are also cases of serious discrepancies between "nominal price" and "actual value." Even if tokens issued by Web3 project teams have set issuance prices, valuations, or non-inflationary mechanisms, these prices are often merely internal economic model settings of the project and are not equivalent to their realizable value in the actual market. Therefore, when lawyers handle criminal cases involving charges such as embezzlement by reason of office, theft, and fraud, they must distinguish among three levels: "liquidity," "market price," and "realizable value."

First,Liquidity is a prerequisite for the realization of valueMainstream cryptocurrencies such as BTC and ETH possess deep liquidity, with relatively stable market supply and demand relationships, allowing judicial authorities to obtain more objective reference prices. In contrast, many meme coins, tokens internally issued by project teams, and even some tokens still in private placement rounds that have not been listed on exchanges have extremely shallow trading depth. Buyers and sellers are highly dependent on control by the project team, and they fundamentally lack genuine market liquidity.

Second,The so-called "market price" may not be a price admissible in judicial proceedingsThe prices displayed on-chain for a large number of tokens may result from market-making by project teams, small-volume trades, or even "price pumping" activities. Such prices lack universality and fungibility and are difficult to reflect true value. For example, a token quoted at USD 1 on an exchange does not mean that the perpetrator can sell the entire amount involved in the case at that price.

Finally, what is more critical in judicial determination isrealizable valuethat is, the price at which the token can actually be cashed out in reality without significantly affecting the market price. Only the realizable amount is truly relevant to property losses, illegal gains, and the amount involved in the case. For tokens with weak liquidity, shallow trading depth, or prices self-set by project teams, calculating the amount involved in the case based on their "nominal price displayed on-chain" is highly likely to lead to a significant imbalance in sentencing outcomes. Especially in the Web3 field, tokens are subject to factors such as project risks, regulatory policies, and exchange rules, and may be delisted at any time. Once trading channels are lost, their prices may even drop to zero instantly, further demonstrating that "nominal price" does not truly reflect token value.

Therefore, when a perpetrator is suspected of embezzlement by reason of office or other amount-based crimes, whether the basis for determining the amount is the "on-chain transaction price at the time of embezzlement," the "TGE/private placement round price during the token issuance phase," or the "actual realizable amount" will directly affect the sentencing range, and may even determine whether the case falls within the sentencing bracket of less than three years or more than ten years. In circumstances where tokens face risks of being delisted at any time, becoming untradeable, or their prices rapidly dropping to zero, their true value should be judged with greater caution to avoid a disconnect between the determination of the amount and judicial reality.

Second, the court held that the pricing of in-game currency is not identical to the amount of property loss suffered by the operator as a result of the crime. Generally, the amount involved in property crimes is equivalent to the victim’s loss. However, operators can continuously replicate in-game currency by modifying code; even if some in-game currency is lost, they can still meet any purchase demand from players. Therefore, although Shen’s unauthorized addition and sale of in-game currency were priced at RMB 1 million, this cannot be equated to an actual loss of RMB 1 million in funds by the game company. The pricing of in-game currency represents only the expected return that the game company might obtain, rather than the amount of actual property loss.

In the field of crypto assets, similarly, how to determine the value of tokens remains a highly controversial issue in criminal practice. Whether crypto assets possess the attribute of “property” within the meaning of criminal law is a prerequisite for their value to receive protection under criminal law. Mainstream cryptocurrencies (such as Bitcoin and Ethereum) have basically been recognized as having property attributes in judicial practice due to their scarcity, public circulability, and market pricing mechanisms. However, certain tokens that are priced solely by project issuers, lack genuine market liquidity, and are not supported by actual application scenarios have values similar to those of in-game currency; their value is more subjectively assigned by the issuer rather than formed through real market transactions. Therefore, it is difficult to regard them as “property” with universally recognized economic value.

For such tokens, where the perpetrator illegally obtains or transfers a substantial amount, Attorney Shao believes that it is more appropriate to evaluate the conduct asthe crime of illegally obtaining data from computer information systems, rather than directly treating it as property crimes such as embezzlement by reason of office, so as to avoid significant imbalance in the determination of the amount involved.

Third, the court held that, with respect to virtual assets such as in-game currency, a criminal policy of moderate protection should be adhered to. The court affirmed the positive social role of the gaming industry while also emphasizing the value conflict between the industry and the protection of adolescents’ physical and mental health. Therefore, in terms of criminal policy, the principle of moderate protection should be maintained for such virtual assets, and excessive interests should not be protected. In other words, if a game company sells in-game currency through normal channels, whether players recharge and the amount recharged are uncertain. If the crime amount is determined based on the RMB 1 million pricing of the in-game currency in this case and restitution is ordered, it would result inexcessive protection of the game company’s uncertain interests, allowing it to profit from the criminal act, which is inappropriate.

This policy approach also has important reference value when handling duty-related crimes in the field of crypto assets. Since the 2013 Notice on Preventing Bitcoin Risks, to the 2017 “September 4 Announcement” comprehensively prohibiting initial coin offerings (ICOs), to the 2021 “September 24 Notice” characterizing virtual currency-related business activities as illegal financial activities, and further to November 28, 2025, when the People’s Bank of China, jointly with the Ministry of Public Security, the Supreme People’s Court, the Supreme People’s Procuratorate, and ten other departments, convened the “Coordination Mechanism Meeting on Combating Virtual Currency Trading and Speculation”, we can see that the state has consistently regarded virtual currency trading asIllegal financial activities, and it has continuously emphasized the need to guard against the risks associated with speculative trading in virtual currencies. Against this policy backdrop, where entities such as Web3 project sponsors and virtual currency exchanges assert, as "victim units," that their virtual assets have been infringed, it is debatable whether their claims constitute interests that should be protected under criminal law and whether they possess "protectability."

In cases of this nature, directly treating project sponsors or exchanges as presumptive "victim units" and, on that basis, determining high monetary amounts may conflict with the State’s regulatory stance on virtual currencies. Therefore, in handling duty-related crimes such as embezzlement by employees and bribery by non-state staff, it remains necessary, in light of policy orientations, to exercise greater prudence in determining whether the so-called "property interests" fall within the scope of protection under criminal law.

Summary:
The foregoing analysis demonstrates that determining the amount involved in cases within the crypto assets sector is significantly more complex than assessing the value of in-game currency in the traditional gaming sector. This complexity arises not only from the economic structure and liquidity of the assets themselves, but also from the overlay of more sensitive and multi-layered policy considerations, which render the determination of amounts in judicial practice more uncertain and subject to greater dispute.

Concluding Remarks:

For lawyers who have long specialized in the new economy and Web3 sectors, it is essential to recognize that in-game currencies and crypto assets are not the same legal objects; their economic logic, technological foundations, and regulatory attributes differ fundamentally. Accordingly, our study of criminal cases in the traditional gaming industry is never intended to simply transpose those approaches to the Web3 domain, but rather to understand the mindset and adjudicative habits of case-handling personnel when confronted with "virtual assets." Only by truly comprehending their cognitive framework can lawyers identify effective entry points for communication and argumentation, thereby achieving meaningful dialogue.

At the same time, it is imperative to recognize that the investigative and prosecutorial logic in Web3 cases differs entirely from that in traditional cases. Whether considering the value-formation mechanisms, trading mechanisms, and liquidity structures of tokens, or the policy positioning of virtual currencies within China, these factors dictate that such cases involve greater uncertainty and more pronounced disputability in terms of legal characterization, amount determination, and the scope of criminal-law protection. Case-handling personnel often lack industry-specific knowledge, and thus lawyers’ professional judgments and lines of argument frequently become significant factors influencing the direction of legal characterization.

Therefore, in such cases, lawyers cannot rely on a single approach or on traditional experience alone. Instead, drawing on extensive practical experience in coin-related matters, they should flexibly navigate among four dimensions—asset structure, technical principles, market value, and policy background—to craft the most suitable defense strategy for their clients.

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