Special Disclaimer: This article is an original work by Attorney Shao Shiwei. It reflects only the author’s personal views and does not constitute legal advice or a legal opinion on any specific matter. For article reprints, legal consultations, or business exchanges, please add: sswls66

 

In the field of criminal justice, the legal characterization of virtual assets is increasingly revealing significant practical and theoretical dilemmas. In judicial practice, adjudicatory bodies often reach markedly different conclusions in cases involving virtual assets with highly similar modus operandi, creating a reality of "similar cases, different judgments." This not only results in a lack of uniform standards for sentencing but may also directly affect the boundary between criminal and non-criminal conduct, thereby undermining the stability and predictability of criminal adjudication.

 

At the same time, existing theoretical discussions largely revolve around the “property attributes” versus “data attributes” dichotomy. They lack a systematic deconstruction of the normative concept of “property in the sense of criminal law” and fail to effectively address complex practical forms such as meme coins, pre-issued tokens, and tokens whose value has fallen to zero. As a result, theoretical analysis struggles to align directly with the adjudicatory needs of specific cases.

 

In light of this, this article attempts to respond to the aforementioned dual dilemmas by exploring analytical pathways with greater explanatory power, with a view to promoting further discussion at both the practical and theoretical levels.



I. Author: Attorney Shao Shiwei

 

Inthe previous article, Attorney Shao highlighted that the significance of a refined discussion on the criminal-law attributes of virtual assets lies in the judicial reality of “different judgments for similar cases.” Furthermore, we systematically elaborated on the normative hierarchy and core distinctions among the criminal-law concepts of “property,” “things of property,” and “property in the sense of criminal law,” clarifying that they form a progressive relationship with successively narrowing scopes and increasingly stringent evaluations. This provides the necessary foundational conceptual framework for accurately discussing the legal attributes of virtual assets.

 

 

 

3

Theoretical Foundation: Three Core Elements for Identifying “Property in the Sense of Criminal Law”

 

In Zhang Mingkai’s theoretical framework, the reason why “things of property” can be distinguished from the broadest concept of “property,” and further delineated as “property in the sense of criminal law,” is that they must simultaneously satisfy the following three elements:

 

Possibility of Control：

This means that the property must be capable of being dominated and controlled by human effort. Such domination is not limited to physical possession but places greater emphasis on a state of exclusive control, whether de jure or de facto.

 

For example, although air has utility value, it does not constitute property because it cannot be exclusively controlled by specific individuals.Electricity, as an intangible object, is deemed in judicial practice to be a subject matter of the crime of theft because it can be precisely measured and controlled through lines and meters, thereby possessing "possibility of management." This element serves as thethreshold。

 

Possibility of Transfer:

This refers to the ability of property to be transferred between different rights holders, where such transfer results in the original rights holder losing dominion and control over it. This element ensures that acts infringing upon property (such as theft and fraud) can causesubstantive harm to property interests。

 

. Although real property has weaker manageability, it can be legally transferred through changes in title registration, and thus still constitutes property. Conversely, items such as goodwill and enterprise qualifications, despite having significant value, are difficult to transfer independently without being attached to the enterprise entity, and are therefore generally not regarded as "property" that can be directly misappropriated by specific criminal acts.

 

Value:

This means that property must possess economic value (also known as exchange value or objective value) or sufficient utility value worthy of protection under criminal law (also known as subjective value). The assessment of value here hasboth objective and subjective dimensions。

 

. Objective economic value is easily understood, such as gold and currency. Subjective utility value is reflected in the fact that even if the market exchange value is extremely low, the item may have irreplaceable special significance to the rights holder (such as unique family photographs or letters), and criminal law may protect it based on its significant subjective value (such as in the crime of intentional destruction of property). The element of value determines the necessity and intensity of criminal law protection.

 

According to Professor Zhang Mingkai, an object must first qualify as “property” by satisfying the three criteria; furthermore, when it becomes the object of a specific property crime (such as theft or robbery), it constitutes “property in the criminal-law sense.”

 

The reason why “proprietary interests” (such as creditor’s rights, equity interests, and the right to receive services) can be subsumed within the category of “property” is precisely because they fully satisfy the aforementioned three criteria: they can be controlled through instruments evidencing rights (possibility of management), transferred through assignment, discharge, or other means (possibility of transfer), and possess definite economic value (value).

 

Should virtual currencies therefore be recognized as “property,” and even as “property in the criminal-law sense”?

 

 

 

4

Current Criminal-Law Evaluation of the Legal Nature of Virtual Currencies

 

From a criminal-law perspective, the debate over the legal nature of virtual currencies has never ceased. This debate not only reflects divergent academic views but also directly affects the boundaries between criminal and non-criminal conduct, and between different offenses, in judicial practice. Broadly speaking, prevailing views fall into three main categories. The rationales and normative bases underlying each category profoundly reflect differing emphases on balancing the “data nature” and the “property nature” of virtual currencies.

 

(I) Major Divisions of View: The Data Theory, the Property Theory, and the Compromise Theory

 

1. The “Data Theory,” Which Completely Denies Property Status

 The core contention of the “Data Theory” is to completely deny that virtual currencies qualify for protection as “property” under criminal law. Representative scholar Professor Ye Zhusheng has systematically critiqued this issue from multiple perspectives[i].

 

  • Ontological Critique: Professor Ye Zhusheng argues that, ontologically, virtual currencies are merely data ledgers recorded on a blockchain, with their value contingent upon recognition of mining rights or the credit of centralized issuing institutions. However, China’s financial policies have explicitly negated their monetary function; therefore, in a normative sense, the value foundation of such “ledgers” has been hollowed out, leaving them to revert to their pure data essence.

 

  • Absence of Requisites for Legal Characterization as Property: “Property” under criminal law must possess exclusivity of possession and controllability. However, blockchain technology entails theoretical risks of tampering and replication, and security levels vary significantly across different tokens, failing to meet the requirement of absolute exclusivity. Meanwhile,Lack of lawful priceabilityconstitutes a key obstacle. Because China prohibits the provision of pricing services for virtual currencies, there are no lawful and well-developed trading markets. If judicial authorities were to adopt prices from overseas or black markets, it would amount to endorsing illegal transactions.

 

  • Challenges based on the unity of the legal order: The "data theory" emphasizes that recognizing virtual currencies as property under criminal law would de facto safeguard the security of their transactions and indirectly facilitate related activities, which conflicts with the objectives of China's civil judiciary (which often holds that such transactions violate public order and good morals) and financial regulatory policies, thereby violating the principle of the unity of the legal order.

 

2. The "property theory" affirming the attribute of property

 The "property theory" is increasingly becoming the mainstream view in judicial practice, particularly garnering substantial support in the handling of criminal cases. Its core arguments focus on the factual attributes and economic functions of virtual currencies.

 

  • Possession of core characteristics of property: Virtual currencies possess clear utility (capable of satisfying holders' needs), scarcity (e.g., the fixed total supply of Bitcoin), and controllability (controlled through private keys), fully aligning with the general attributes of "property."

 

  • Policies do not negate the attribute of property: The 2013 Notice on Preventing Bitcoin Risks explicitly defined Bitcoin as a "virtual commodity," providing a policy basis for acknowledging its property attributes. Subsequent regulatory policies have focused on prohibiting its circulation as currency and related financial activities, without prohibiting individual holdings or negating its potential status as property.

 

  • Necessity of practical protection: To effectively combat criminal offenses targeting virtual currencies, such as fraud, robbery, and pyramid schemes, and to ensure that punishments correspond to the crimes and criminal responsibility, it is essential to recognize them as property under criminal law. If they were regarded merely as data, it would be difficult to assess their significant economic value and social harm. Some scholars have pointed out that full adoption of the "data theory" would lead to difficulties in determining convictions and sentencing in crimes such as bribery and money laundering[ii].

 

3. The “Compromise Theory” and the “Tiered and Categorized Approach” Seeking Balance

In response to the aforementioned dilemmas, a more pragmatic compromise or “tiered and categorized” approach is gaining broad recognition in both theoretical and practical circles.

 

  • Dual Attributes and Concurrence of Legal Interests: This view holds that virtual currencies simultaneously possess data attributes and property attributes, which are inseparable[iii]. For example, stealing Bitcoin by intruding into a computer system infringes both the legal interest in the data security of computer information systems and the legal interest in property. In terms of legal assessment, such conduct may constitute an imaginative concurrence of the crime of illegally obtaining computer information system data and the crime of theft, among others, and should be punished according to the heavier offense.

 

  • Differentiated Treatment Based on Type and Scenario: A one-size-fits-all determination for virtual currencies is inappropriate. Signals released by the People’s Courts through their case repository indicate that judicial practice is adopting a typological approach[iv].

 

 

(II) Root of the Controversy: Practical Contradictions Between Legal Characterization and Policy Considerations

 

The root of the above controversy lies in the fact that, as an emerging phenomenon, the legal characterization of virtual currencies spans multiple fields and faces multifaceted practical contradictions and regulatory challenges:

 

  • Contradiction Between Technical Facts and Legal Norms: Technically, it is data; economically, it has value. Criminal law faces interpretive difficulties in subsuming these two facts under the normative concept of “property.”

 

  • Contradiction Between Civil and Criminal Assessments: In the civil sphere, due to regulatory policies, transaction contracts involving virtual currencies are often deemed invalid, with parties bearing their own risks; in the criminal sphere, to punish crimes and recover losses, it is necessary to recognize their property value. This inconsistency between civil and criminal assessments poses challenges for judicial practice.

 

  • Tension between Judicial Activism and Policy Constraints: To properly adjudicate cases, judicial organs are motivated to recognize the property attributes of virtual assets to ensure accurate sentencing. However, this creates tension with the State’s strict prohibition on virtual currency transactions. Judicial decisions must guard against implicitly endorsing illegal financial activities.

 

 

(III) Cognitive Gap: Practical Dilemmas and Knowledge Barriers in Judicial Practice

 

Behind the theoretical controversies and policy contradictions lies a more fundamental issue affecting the quality of adjudication in virtual currency cases: some judicial decision-makers lack an accurate understanding of the basic facts concerning the core subject matter of such cases—virtual currencies. This cognitive deficiency is not a matter of legal methodology, but stems from a lack of foundational knowledge regarding their technical principles and economic models.

 

An article published in the People's Court Daily on December 5, 2024, titledCriminal Law Characterization of Illicit Theft of Virtual Currenciesclearly reveals the existence and severity of this issue.

 

The author of the article is from a primary-level people’s court. While the adjudicative reasoning presented (holding that the theft simultaneously constitutes the crime of theft and the crime of illegally obtaining computer system data, to be handled as an imaginary concurrence of offenses) reflects a common view in current practice, the key factual arguments supporting this view contain significant errors:

 

In its discussion, the article repeatedly misspells the involved virtual asset USDT (Tether) as “USTD.” Such persistent typographical errors in basic terminology somewhat undermine the seriousness and professionalism of the discourse.
To argue that USDT possesses the “value” and “scarcity” necessary for property attributes, the article claims that USDT is scarce, has a fixed total supply, and is not infinitely available; it asserts that USDT can only be generated through “mining,” which embodies socially abstract labor. This determination is entirely inconsistent with the facts. USDT is a centralized stablecoin issued by Tether Limited, backed by claimed U.S. dollar assets on a 1:1 basis. Its issuance and redemption are based on market demand and reserve operations, which are fundamentally different from cryptocurrencies such as Bitcoin that are generated through proof-of-work (PoW) “mining.” Confusing centrally issued credit-based stablecoins with decentralized mining mechanisms indicates that the author failed to accurately distinguish the core technical principles and economic substance of different types of virtual assets.

 

As a case published in the People's Court Daily, this article exposes numerous issues:

 

It reflects widespread knowledge gaps in judicial cognition:
The error is not an immaterial detail; rather, it arises in the core argumentation that defines the proprietary attributes. This indicates that some judicial personnel may still hold a relatively rudimentary and generalized understanding of virtual assets, failing to carefully distinguish between the markedly different technical architectures and value-generation logics underlying them.
This highlights the absence of review standards in authoritative publication channels:
As the official newspaper of the Supreme People’s Court, the People’s Court Daily publishes case commentaries that have significant reference and guiding value for judicial practice nationwide. According to its call for submissions, such articles must be reviewed by relevant departments of the Supreme People’s Court. The fact that major omissions concerning basic facts could pass review and be publicly published indicates that, within the current judicial knowledge system, effective mechanisms for factual verification and professional expertise gatekeeping have not yet been established for novel digital assets such as virtual assets.
Potential impact on the substantive fairness of judicial adjudication:
Criminal judgments must be premised on accurate factual findings. When the “facts” serving as the minor premise of legal reasoning (such as the assertion that “USDT derives its value from mining”) are themselves flawed, the legitimacy of the judgment’s conclusion may be undermined, regardless of how the subsequent application of law is deduced. In relation to key sentencing factors, such as the determination of the amount involved in the crime, determinations based on erroneous factual premises may directly affect the rights and interests of the parties concerned.

 

 

In summary, it is evident that current discussions on the criminal-law attributes of virtual assets are influenced both by divergent theoretical positions and policy orientations, and constrained by the gap between judicial cognition and objective facts. While theoretical divergences may be gradually addressed through academic research and normative interpretation, and ambiguous policy boundaries require further clarification at the legislative and judicial levels, in specific cases, the adjudicator’s understanding of foundational facts—such as the technical form, operational mechanisms, and value-formation methods of virtual assets—often becomes a key variable affecting qualitative conclusions, thereby exerting a decisive influence on the conviction and sentencing of defendants.

 

Existing theories, such as the “data theory,” the “property theory,” and related compromise views, tend to evaluate “virtual assets” in an abstract and homogenized manner. While this provides an analytical framework for judicial practice at a macro level, these theories struggle to directly address specific issues when cases proceed to individual adjudication: namely, whether and how a particular type of virtual asset enters the criminal-law evaluation system under specific temporal, technical, and transactional structures. It is precisely in the transition from abstract theory to concrete adjudication that the risks of cognitive bias and factual misjudgment are significantly amplified, constituting a core issue that subsequent practical analysis must urgently and directly address.

 

[i] Analysis of the “Criminal-Law Property Theory” of Virtual Currencies – China Court Network https://www.chinacourt.cn/article/detail/2024/05/id/7942104.shtml

[ii] Deng Jianpeng, Li Chengyu | Judicial Dilemmas and Theoretical Reconstruction in Determining the Attributes of Crypto Assets (Condensed Edition) https://mp.weixin.qq.com/s?__biz=MzAwODg0ODQzNw==&mid=2247487264&idx=1&sn=cd64c06a13d4bea52174f1e351308403&chksm=9ae5d7ade675ddcd940e1e194d6869d1b0f3ac1dfb7dcddb1b2d82eddd262a4c4a58c63b2adc&scene=27

[iii] Tiered and Classified Determination of Crimes Involving Digital Currencies _ Supreme People’s Procuratorate of the People’s Republic of China https://www.spp.gov.cn/spp/llyj/202407/t20240731_662077.shtml

[iv] Interpretation of Reference Cases Added to the Database on the Topic of Online Virtual Property – Legal Practice – China Law Innovation Network http://www.fxcxw.org.cn/html/145/2025-09/content-28576.html

 

 

 

Recommended Reading

Misconceptions in Characterizing the Illegal Acquisition of Virtual Currencies: Judicial Divergence on Property Attributes versus Data Attributes (Part I)

Supreme People’s Court Issues New Rules: Addition of “Disputes over Data and Online Virtual Property” as a Cause of Action—Prospects for Resolving Adjudication Difficulties in Cryptocurrency (Virtual Currency) Cases

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