The Myth of Defining the Illegal Acquisition of Virtual Currency: Judicial Disagreement Between Property and Data Attributes (Part Two)

This article attempts to respond to the aforementioned dual dilemma and explore more explanatory analytical paths in order to promote further discussion at both the practical and theoretical levels.

Author: Lawyer Shao Shiwei

In the field of criminal justice, the legal characterization of virtual currencies is gradually revealing significant practical and theoretical dilemmas. In judicial practice, different adjudicating bodies often reach significantly different conclusions in virtual currency-related cases with highly similar modus operandi, resulting in a situation of "different judgments for similar cases." This not only leads to a lack of unified standards for sentencing but may also directly affect the boundary between guilt and innocence, thereby weakening the stability and predictability of criminal judgments.

At the same time, existing theoretical discussions mostly revolve around the "property attributes" and "data attributes," lacking a systematic breakdown of the normative concept of "property in the sense of criminal law," and failing to effectively respond to complex practical forms such as meme coins, pre-issued tokens, and tokens with zero value, making it difficult for theoretical analysis to directly meet the adjudication needs of specific cases.

Based on this, this paper attempts to respond to the aforementioned dual dilemma and explore more explanatory analytical paths in order to promote further discussion at both the practical and theoretical levels.

In the previous article , Attorney Shao mentioned that the significance of a detailed discussion on the criminal law attributes of virtual currency lies in the current judicial situation of "different judgments for similar cases." Furthermore, we systematically elaborated on the normative hierarchy and core differences between the criminal law concepts of "property," "real estate," and "real estate in the criminal law sense," clarifying that they are progressively narrowing in scope and increasingly stringent in evaluation. This provides the necessary conceptual framework for accurately discussing the legal attributes of virtual currency.

Theoretical Foundation: Three Core Elements for Defining "Property in the Criminal Law Sense"

In Zhang Mingkai's theoretical system, the reason why "property" can be extracted from the broadest concept of "property" and further defined as "property in the sense of criminal law" is that it must simultaneously meet the following three elements:

Management possibilities :

This refers to the requirement that property must be subject to human control and dominion. This control is not limited to physical possession, but emphasizes a legal or de facto exclusive state of management.

For example, while air has practical value, it cannot be exclusively controlled by any specific individual and therefore is not considered property. Electricity , as an intangible substance, possesses "manageability" because it can be precisely measured and controlled through lines and meters, thus being considered an object of theft in judicial practice. This element is the threshold for an object to enter the realm of legal evaluation.

Transfer probability:

This refers to the ability of property to be transferred between different rights holders, and such transfer results in the original rights holder losing control and dominion over it. This element ensures that acts that infringe upon property (such as theft or fraud) can cause substantial damage to property rights.

Although real estate has limited management capabilities, it can be legally transferred through changes in property registration, and therefore still falls under the category of property. Conversely, assets such as goodwill and corporate qualifications, while possessing significant value, are difficult to transfer independently without being attached to a corporate entity, and are therefore generally not considered "property" that can be directly seized by specific criminal acts.

Value:

This means that the property must have economic value (or exchange value, objective value) or sufficient use value (or subjective value) to warrant protection under criminal law. The value judgment here has both objective and subjective aspects .

Objective economic value is easy to understand, such as gold and currency. Subjective use value, on the other hand, is reflected in the fact that even if the market exchange value is extremely low, if it has irreplaceable special significance to the rights holder (such as unique family photos or letters), criminal law may protect it based on its significant subjective value (such as the crime of intentional damage to property). The value element determines the necessity and strength of criminal law protection.

According to Zhang Mingkai, an object must first be "property" selected through these three elements. Then, when it becomes the object of a specific property crime (such as theft or robbery), it becomes "property in the sense of criminal law".

The reason why "property interests" (such as claims, equity, and the right to enjoy services) can be included in the category of "property" is precisely because they fully meet the above three elements: they can be controlled through certificates of rights (possibility of management), can be transferred through transfer, settlement, etc. (possibility of transfer), and have clear economic value (value).

So, should virtual currency be considered "property," or even "property in the sense of criminal law"?

Criminal Law Evaluation of the Current Legal Attributes of Virtual Currency

From a criminal law perspective, the debate surrounding the legal attributes of virtual currencies has never ceased. This debate not only reflects differences in academic viewpoints but also directly relates to the boundaries between crime and non-crime, and between different types of crimes, in judicial practice. In summary, current opinions mainly fall into three categories, and the rationale and normative basis behind each viewpoint profoundly reflect the different emphases placed on the balance between the "data attributes" and "property attributes" of virtual currencies.

(I) Main viewpoints: Data-driven, Financial-based, and Compromise-based approaches

1. The "data-driven" approach that completely negates the property-related attributes of goods.

The core argument of the "data-driven theory" is to completely deny that virtual currencies qualify as "property" under criminal law. Professor Ye Zhusheng, a representative scholar of this view, has systematically criticized it from multiple perspectives [i].

• Ontological Critique : Ye Zhusheng argues that virtual currencies are, on the ontology, merely data ledgers recorded on the blockchain, their value dependent on the recognition of the right to record transactions or the credit of centralized issuing institutions. However, China's financial policies have explicitly denied their monetary function; therefore, in a normative sense, their value foundation as a "ledger" has been hollowed out, leaving them only to revert to their pure data essence.

• The legal requirements for ownership are lacking : Under criminal law, "property" requires exclusive possession and control. However, blockchain technology carries the theoretical risks of tampering and replication, and different tokens have vastly different security levels, failing to meet the requirement of absolute exclusivity. Furthermore, the lack of legitimate pricing power is a key obstacle. Since China prohibits providing pricing services for virtual currencies, a legitimate and well-developed trading market does not exist. If judicial authorities adopt prices from overseas or the black market, it would be tantamount to endorsing illegal transactions.

• Questioning the uniformity of legal order : The "data argument" emphasizes that classifying virtual currency as criminal property would indirectly protect its transaction security and promote related activities. This conflicts with the goals of China's civil justice (which often recognizes related transactions as violating public order and good morals) and financial regulatory policies, thus violating the principle of the uniformity of legal order.

2. The "property theory" that affirms the property's inherent value.

The "property-based argument" is a mainstream view increasingly emerging in current judicial practice, especially in the handling of criminal cases. Its core argument focuses on the factual attributes and economic functions of virtual currencies.

• It possesses the core characteristics of property : virtual currencies have clear utility (able to meet the needs of holders), scarcity (such as the fixed total supply of Bitcoin), and disposability (controlled by private keys), which fully conforms to the general attributes of "property".

• The policy did not deny its property attributes : The 2013 "Notice on Preventing Risks of Bitcoin" explicitly defined it as a "virtual commodity," which provided a policy interface for recognizing its property attributes. Subsequent regulatory policies focused on prohibiting its use as currency and related financial activities, but did not prohibit individuals from holding it or deny its possibility of being considered property.

• The necessity of practical protection : In order to effectively combat crimes such as fraud, robbery, and pyramid schemes targeting virtual currencies and to achieve proportionality between crime and punishment, it is necessary to recognize them as property under criminal law. If they are only regarded as data, it will be difficult to evaluate their huge economic value and social harm. Some scholars have pointed out that the complete adoption of the "data theory" will lead to difficulties in conviction and sentencing in crimes such as bribery and money laundering[ii].

3. The "Compromise Theory" and the "Hierarchical Classification Theory" Seeking Balance

In response to the aforementioned disagreements, a more practical compromise or "hierarchical classification" approach is gaining widespread acceptance in both theoretical and practical circles.

• Dual Attributes and Concurrence of Legal Interests : This view holds that virtual currencies possess both data attributes and property attributes, and the two are inseparable [iii]. For example, stealing Bitcoin by intruding into a computer system infringes upon both the data security legal interest of the computer information system and the property legal interest. In legal evaluation, this may constitute a concurrence of the crimes of illegally obtaining data from a computer information system and theft, and should be punished according to the more serious crime.

• Based on differentiated treatment by type and scenario : a "one-size-fits-all" approach to virtual currencies is inappropriate. The signals released by the People's Courts through their case database indicate that judicial practice is adopting a categorized approach [iv].

(II) Root of the controversy: The real-world contradiction between legal attributes and policy considerations

The root of the above controversy lies in the fact that, as a new phenomenon, the legal definition of virtual currency spans multiple fields, facing various real-world contradictions and regulatory challenges:

• The contradiction between technical facts and legal norms : technically it is data, economically it has value. How criminal law can encompass these two facts under the normative concept of "property" presents an interpretive challenge.

• The contradiction between civil and criminal evaluation : In the civil field, due to regulatory policies, transaction contracts involving virtual currencies are often deemed invalid, with the risk borne by the transacting party; in the criminal field, to punish crimes and recover losses, their property value must be recognized. This inconsistency between civil and criminal evaluation has caused difficulties in judicial practice.

• The contradiction between judicial initiative and policy constraints : In order to properly handle cases, judicial organs are motivated to recognize the property attributes of virtual currencies in order to accurately determine sentences. However, this is in conflict with the state's strict prohibition on virtual currency transactions, and judicial rulings must be careful to avoid indirectly "endorsing" illegal financial activities.

(III) Cognitive Discontinuity: Real-world Dilemmas and Knowledge Barriers in Judicial Practice

Behind the theoretical controversies and policy contradictions, a more fundamental issue affects the quality of adjudication in virtual currency cases: some judicial judges lack an accurate understanding of the basic facts concerning the core object of the cases—virtual currency. This lack of understanding is not a problem of legal methodology, but rather stems from a deficiency in basic knowledge of its technical principles and economic models.

The article "Criminal Characterization of Illegal Theft of Virtual Currency" published in the People's Court Daily on December 5, 2024, clearly reveals the existence and seriousness of this problem.

The author of this article comes from a grassroots court. While the reasoning behind the judgment (determining that the theft constitutes both theft and illegal acquisition of computer system data, and treating it as a case of concurrent offenses) reflects a common viewpoint in current practice, the key factual argument supporting this viewpoint contains significant errors: the article repeatedly misspells the virtual currency involved, USDT (Tether), as "USTD." Such persistent errors in basic terminology undermine the seriousness and professionalism of the argument.
To demonstrate that USDT possesses the necessary "value" and "scarcity" to qualify as property, the article argues that USDT is scarce, with a fixed total supply, not infinitely available; and that it must be generated through "mining," which embodies abstract social labor. This assertion is entirely unfounded. USDT is a centralized stablecoin issued by Tether, backed by a claimed 1:1 leverage of US dollar assets. Its issuance and redemption are based on market demand and reserve operations, fundamentally different from cryptocurrencies like Bitcoin, which are generated through Proof-of-Work (PoW) mining. Confusing a centrally issued stablecoin with a decentralized mining mechanism demonstrates the author's failure to accurately distinguish the core technological principles and economic essence of different types of virtual currencies.

This case, published in the *People's Court Daily*, exposes numerous problems: it reflects a widespread knowledge gap in judicial understanding ; the errors are not minor details, but occur in the core argumentation process of defining property attributes. This indicates that some judicial personnel may still have a relatively basic and general understanding of virtual currencies, failing to distinguish in detail the distinctly different technical architectures and value generation logics behind them.
This highlights the lack of review standards in authoritative publication channels: As the official newspaper of the Supreme People's Court, the *People's Court Daily* publishes case analyses that have significant reference and guiding value for judicial practice nationwide. According to the newspaper's call for papers, such articles must be reviewed by relevant departments of the Supreme People's Court. The fact that such significant oversights involving basic facts could pass review and be publicly published indicates that, within the current judicial knowledge system, an effective fact-checking and professional knowledge verification mechanism has not yet been established for new digital assets such as virtual currencies.
This could potentially affect the substantive fairness of judicial decisions : Criminal judgments must be based on accurate factual findings. When the "facts" that serve as the minor premise of legal reasoning (such as "USDT generates value through mining") are flawed, regardless of how the subsequent application of law unfolds, the legitimacy of the judgment may be undermined. In key sentencing factors such as the determination of the amount involved in the crime, such a finding based on erroneous factual premises could directly impact the rights and interests of the parties involved.

In summary, the current discussion surrounding the criminal law attributes of virtual currencies is influenced by both divergent theoretical stances and policy orientations, as well as the gap between judicial understanding and objective facts. Theoretical disagreements can be gradually addressed through academic research and normative interpretation; the ambiguity of policy boundaries also depends on further clarification at the legislative and judicial levels. However, in specific cases, the judge's understanding of the fundamental facts regarding the technological form, operational mechanism, and value formation of virtual currencies often becomes a key variable influencing the qualitative conclusion and will have a decisive impact on the conviction and sentencing of the defendant.

Existing "data-driven" and "property-based" theories, along with related compromises, tend to evaluate "virtual currency" holistically in an abstract and homogeneous manner. While this provides an analytical framework for judicial practice at the macro level, it fails to directly address specific issues when cases reach the adjudication stage: whether and how a particular virtual currency, under specific time, technological conditions, and transaction structures, should be included in the criminal law evaluation system. It is precisely in this process of moving 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 urgently needs to address.

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

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

[iii] Tiered and Categorized Identification of Digital Currency-Related Crimes - Supreme People's Procuratorate of the People's Republic of China https://www.spp.gov.cn/spp/llyj/202407/t20240731_662077.shtml

[iv] Case Studies on the Special Topic of Online Virtual Property - Legal Practice - China Legal Innovation Network http://www.fxcxw.org.cn/html/145/2025-09/content-28576.html

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