Summary:
If your family member or friend has been detained in connection with virtual assets, the determination of the amount involved directly affects whether they can be released and the length of any sentence. Many people are unaware that the valuation of crypto assets may be based on the purchase price, the time of theft, or the time of sale. Valuations at different points in time can lead to outcomes ranging from acquittal to imprisonment. This article uses real cases to explain whether judicial authorities determine criminal liability based on the victim’s losses or on the proceeds from disposing of stolen assets, and advises family members on which temporal benchmarks to leverage when seeking acquittal or a lighter sentence for their relatives.
Keywords:
virtual assets, determination of the amount involved, criminal defense, timing of crypto asset valuation, crime of aiding information network criminal activities
Main Text:
In criminal cases involving virtual assets, differing choices of the valuation date for crypto assets can lead to diametrically opposite conclusions as to whether conduct constitutes a crime.
In the article “How to Determine the Price of Virtual Assets Involved in Theft Cases?,” Attorney Shao cited a real case in which the perpetrator, Zhang San, stole an altcoin held by the victim, Li Si. Zhang San did not convert the assets into cash but instead incurred total losses in subsequent transactions. He was ultimately convicted of the crime of illegally obtaining data from computer information systems, with the amount involved determined at RMB 12,000, and sentenced to eight months’ imprisonment.
However, the method used to calculate this amount is highly controversial.
In that case, the public security organ ultimately adopted the following approach: it referenced the price of the token at 00:00 on the relevant day on a certain exchange to calculate the amount involved. Coincidentally, that price happened to be the highest point for that token on that day and even during that month.
Had the valuation been based on prices at other times on the same day, the amount involved would have remained below RMB 10,000, meaning it would not have reached the threshold required for conviction and sentencing in this case; accordingly, Zhang San would not have constituted a criminal offender.
In judicial practice, discussions surrounding the determination of the amount involved in cases concerning virtual currencies often focus on different calculation methods, such as the proceeds from disposing of stolen goods, market transaction prices, or the victims’ investment costs. However, Attorney Shao believes that these discussions often remain at the level of general principles and lack practical operability.
Once a case enters individualized adjudication, what often determines the outcome is the time point at which the price of the virtual currency should be calculated.
In light of this, this article attempts to examine the issue from a temporal perspective, drawing on typical cases in judicial practice, to outline the common time points for determining cryptocurrency prices in criminal cases involving virtual currencies, and to analyze potential avenues for defense from the perspective of defense counsel.
I. Author: Attorney Shiwei Shao
1
Challenges in Determining the Amount Involved in Virtual Currency Cases
According to Article 4 of the 2013 Interpretation of the Supreme People’s Court and the Supreme People’s Procuratorate on Several Issues Concerning the Application of Law in Handling Criminal Cases of Theft, the method for determining the amount stolen is as follows: “Where there is valid proof of price for the stolen property, the amount shall be determined based on such valid proof; where there is no valid proof of price, or where determining the amount stolen based on such proof is clearly unreasonable, an appraisal agency shall be entrusted to conduct an appraisal in accordance with relevant regulations.”
Therefore, in traditional economic crime cases—whether theft, embezzlement by employees, or duty-related crimes such as corruption and bribery—the determination of the amount involved is typically handled by following this approach:
either based on proof of market price, or through appraisal conducted by a judicial appraisal institution.
However, when a case involves virtual currencies, this set of rules faces difficulties in practice:
Under China’s current regulatory policies, business activities related to virtual currencies constitute illegal financial activities, and relevant institutions are prohibited from providing pricing services for virtual currency transactions. Against this backdrop, the price appraisal and judicial evaluation mechanisms commonly used in traditional criminal cases are often inapplicable in virtual currency cases.
In other words, in criminal cases involving virtual currencies, there is both a lack of authoritative proof of price and difficulty in obtaining appraisals through judicial appraisal institutions.
For this reason, in judicial practice, there are no uniform or clear calculation rules for determining the amount involved in virtual currency cases. In different cases, handling authorities may select different calculation methods depending on the specific circumstances.
Accordingly, in specific cases, how should the amount involved with virtual assets be determined? In the absence of a unified price assessment mechanism, what standards should be applied to determine their value in renminbi (RMB)?
These are precisely the issues to be discussed in the remainder of this article.
2
Two Approaches to Determining the Amount Involved in Judicial Practice
In criminal cases involving virtual assets, due to the lack of a unified valuation mechanism, judicial practice has gradually developed different approaches to determining the amount involved. From a temporal perspective, these approaches can broadly be categorized into two lines of reasoning: one that uses the victim’s losses as the measuring dimension, and another that uses the perpetrator’s final gains as the measuring dimension.
In other words, one approach corresponds to the losses caused at the commencement of the criminal conduct, while the other corresponds to the proceeds obtained upon completion of the criminal conduct.
(1) Benchmark Based on the Victim’s Losses
The first approach determines the amount involved based on the victim’s actual losses, with its core logic being to ascertain the criminal amount by “making whole” the losses incurred.
For example, in the case of Zhong Chongjie for illegally obtaining data from computer information systems [Case No.: (2018) Jing 0108 Xing Chu 1410], the defendant was an operations and development engineer at a certain company. Taking advantage of his position, he remotely controlled the company’s computers and used ROOT privileges to access the servers, implanted code into the Bitcoin wallet program, and transferred 100 bitcoins from the company’s wallet to a wallet address under his personal control.
In that case, the defense argued that, due to the absence of formal pricing by judicial appraisal institutions for bitcoin, it was difficult to directly determine the amount involved based on market prices[i]. Ultimately, the court accepted this view and determined the amount involved from the perspective of the actual losses suffered by the victim entity.
The court held that the losses incurred by the victim entity, such as fees for system appraisal, traffic losses resulting from the attack, losses caused by the inability of the system to operate normally, and costs for vulnerability remediation, amounted to RMB 36,000 in economic losses caused by the perpetrator to the victim entity.
Accordingly, the court sentenced the defendant to one year and three months of fixed-term imprisonment for the crime of illegally obtaining data from computer information systems.
It is worth noting that, if calculated based on the market price of bitcoin at the time, the value of the 100 bitcoins would have exceeded RMB 2 million. Had the amount involved been determined on that basis, the characterization of the offense and the sentencing outcome would have been entirely different.
(2) Using the proceeds from the disposal of stolen assets as the benchmark
Another relatively common approach is to start from the gains obtained after the completion of the criminal act, using the defendant’s final amount realized from disposing of the stolen assets or the actual profit obtained as the amount involved in the case.
For example, in Case No. (2020) Hu 0106 Xing Chu 551, the defendant, Luo, stole Tether (USDT). During the prosecution, the procuratorial organ claimed that the amount involved was approximately RMB 12 million, based on the trading price of USDT on a certain platform at the time Luo committed the theft.
However, the court held that China does not recognize price data published by virtual currency trading platforms as statutory bases for pricing. Therefore, it was inappropriate to directly determine the value of the USDT involved based on historical prices from relevant websites. Ultimately, the court accepted the defense counsel’s opinion and determined the criminal amount to be RMB 900,000, which was the amount Luo actually cashed out and received.
(3) Limitations in the Application of Both Approaches
Viewed chronologically, these two methods of determination correspond to two different stages of the criminal act: one end is the point in time when the victim’s loss occurred, and the other is the point in time when the defendant ultimately obtained profits.
However, in practice, the circumstances of many cases do not fully lend themselves to the application of either of these two approaches.
First, it is not possible to clearly determine the victim’s actual losses in all virtual currency cases. For instance, in some cases involving embezzlement by insiders of project entities, the relevant tokens may not yet have been publicly traded, making it difficult for victims to provide clear evidence of price.
Second, the standard of proceeds from the disposal of stolen assets also has prerequisites for its application. Typically, “disposal of stolen assets” implies that the defendant has already converted the virtual currencies involved into RMB or other tangible property gains.
According to the viewpoint expressed in the article “Exploring the Establishment of Tiered Rules for Determining Criminal Amounts,” published by the Procuratorial Daily on February 20, 2025, “the method by which judicial organs determine the amount of bribes involving the illegal receipt of virtual currencies based on the disposal price applies only to cases where the defendant has converted the virtual currencies involved into cash. This method is difficult to apply in cases where no conversion into cash has occurred, or where the defendant engaged in repeated transactions after obtaining profits.”
Accordingly, if the actor has not converted the virtual assets into cash but merely continues to hold them in their digital wallet or exchange account, such that the assets remain in the circulation stage of virtual assets, it is difficult to apply the calculation method based on the amount realized from disposing of stolen goods.
Accordingly, where neither the victim’s losses can be clearly ascertained nor has any actual disposal of stolen goods occurred, it is necessary to further consider a third approach to determination—using the price of the token at the time the criminal act was committed as the basis for calculating the amount involved in the case. However, adopting this approach gives rise to new questions: Which point in time should be regarded as the completion of the act? Which trading market’s prices should be referenced? And how should the amount be determined when the token is traded only on decentralized exchanges (DEXs) or lacks a stable market price?
These questions are precisely what this article Part II will further discuss.
[i] Typical Cases of Cybercrime, edited by Li Yuping, People’s Court Press, first edition, June 2021, pp. 142–147.
Special Notice: This article is an original work by Attorney Shao Shiwei. It reflects only the author’s personal views and does not constitute legal consultation or legal advice on any specific matter. For article reprints, legal consultations, or professional exchanges, please add: sswls66.
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