How much is the cryptocurrency involved in the case worth? Can the judicial authorities set a price?
introduction
In the past two years, there have been more and more criminal cases involving virtual currencies. In addition to the common cases of money laundering using virtual currencies, fraud involving virtual currencies, pyramid schemes, opening casinos, illegal operations such as currency exchange or illegal foreign exchange trading, and other "highly professional" cases that form a capital pool, there have also been more fraud and theft crimes involving virtual currencies between natural persons. Some of these cases can provide good ideas for the defense and investigation of criminal cases involving currency.
Today we share a fraud case that evolved from an investment dispute over virtual currency between individuals (Case Number: (2019) Jing 0105 Xingchu 2172). Through this case, we will discuss whether the virtual currency involved in criminal cases involving virtual currency can be priced.
1. Case Introduction
From June to July 2018, Zheng defrauded Wang of 32 bitcoins and more than 1,000 ethers at China World Hotel in Chaoyang District, Beijing, under the pretext of helping Wang invest in blockchain projects. Zheng resold the bitcoins and made a profit of more than 1.64 million yuan. After being notified by phone by the police from Jianguomenwai Police Station, Chaoyang Branch, Beijing Municipal Public Security Bureau, Zheng voluntarily surrendered.
After trial, the court held that, based on the victim Wang's statement, witness testimony, documentary evidence and other materials, Zheng fabricated facts for the purpose of illegal possession and defrauded others of property in an extremely large amount, and he should be held criminally responsible for fraud.
In the end, the court sentenced Zheng to ten years in prison and a fine of 200,000 yuan.
2. Beijing Chaoyang District Court: Virtual currency cannot be priced in individual cases
In recent years, the number of virtual currency fraud cases or fundraising fraud cases has been increasing. A very critical issue in such cases is: how to determine the amount involved.
In many of his previous articles, Lawyer Liu has mentioned the different practices of judicial organs in practice, such as the price at which the victim purchased the virtual currency, the price at which the suspect/defendant sold the stolen goods, the market price of overseas virtual currency exchanges, the appraisal/evaluation price of domestic third-party institutions, etc.
However, this case in Chaoyang District, Beijing, clearly stated in the judgment document: " The value of virtual currency is affected by national laws and regulations and industry regulatory policies, and it is not appropriate to directly determine it in individual cases ." In the opinion of Lawyer Liu, this is simply the most standard judgment criterion at present . We will analyze the specific reasons below. The court finally used the defendant Zheng's proceeds of more than 1.64 million yuan from selling stolen goods as the amount involved in the case.
III. Policies and Practices Regarding Virtual Currency
Why is the Chaoyang District Court's judgment written in a standard manner? As early as September 15, 2021, the Notice on Further Preventing and Dealing with the Risks of Virtual Currency Trading Speculation (also known as the "9.24 Notice"), a regulatory policy document on virtual currency jointly issued by ten national ministries and commissions, including the "two high courts and one ministry", uniformly characterized virtual currency-related business activities as " illegal financial activities ", which included providing information intermediary and pricing services for virtual currency transactions.
Although in judicial practice, some people believe that the price determination of the virtual currency involved by the judicial authorities themselves or by entrusting a third-party agency is essentially a judicial activity, and not the "providing pricing services for virtual currency transactions" prohibited by the "9.24 Notice"; however, some people (especially defense lawyers) often believe that the "9.24 Notice" characterizes virtual currency-related business activities as a "one-size-fits-all" comprehensive prohibition, and does not exempt or make exceptions for judicial activities. The price determination of the virtual currency involved by the judicial authorities or their entrusted third-party agencies (such as appraisal agencies, auditing agencies, etc.) is essentially an act of "pricing the virtual currency transactions involved", which is an act that violates the current national regulatory policy on virtual currencies.
How to better solve the problem of determining the value of the virtual currency involved in the case? Lawyer Liu believes that the Beijing Chaoyang District Court has done a good job: the court does not take the initiative to determine the value of the virtual currency involved in the case in principle. In particular, when there is a stolen goods sales amount in the case, the stolen goods sales amount is used first to determine the amount involved in the case. If there is no stolen goods sales amount, the purchase price of the virtual currency involved, the disposal cash amount, the judicial appraisal or evaluation amount, etc. will be considered for determination in this order.
In principle, judicial authorities cannot proactively set prices for virtual currencies involved in a case , unless the amount involved cannot be determined by other means, and the amount involved is indispensable for conviction and sentencing. Only then can they proactively set prices for virtual currencies involved.
IV. Conclusion
A fellow lawyer said, "Nothing has ever caused the law to be so entangled as virtual currency." Lawyer Liu agrees. The reason is not complicated. In fact, it is because our regulators have an overly simple and superficial understanding of virtual currency. They intend to completely control virtual currency with a simple regulatory document. However, in practice, this not only fails to achieve a thorough control effect, but also causes great trouble to the activities of other law enforcement and judicial agencies.
It is very simple to solve this problem. Just modify the "9.24 Notice". As for how to modify it, we will have the chance to talk about it later.
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