Can the victim report the theft of virtual currency?

Author: Liu Zhengyao, Source: Lawyer Liu Honglin

In recent years, there have been more and more cases of virtual currency theft, and many people have been deceived. Victims came to our team hoping that lawyers could help them recover their losses. Some clients even directly asked Lawyer Liu if he could hack into the other party’s wallet and get the coins back. Based on this, Lawyer Liu wrote this article to talk about the correct way to report the case to the public security after the virtual currency is stolen.

01 The legal nature of virtual currency

Virtual The legal characterization of currency determines the attitude of judicial authorities towards virtual currency cases. Although different judicial authorities have different views on virtual currencies, the current judicial practice and theoretical circles can basically reach a consensus on this: whether it is the traditional virtual currency represented by game currency and QQ currency or the current virtual currency that more people understand There is a cost to obtain virtual currencies represented by Bitcoin, Tether, etc.—either by spending money or other property to purchase and replace them, or by spending certain resources to obtain them, such as electricity and computing power. wait. These virtual currencies that include economic costs actually have use value, exchange value, and circulation. The public (at least a part of the public) also recognizes that virtual currencies have property value, that is, a consensus has been reached. Of course, it is difficult for some relatively niche virtual currencies with low consensus to be recognized as having property value.

In criminal law, to determine whether a certain behavior constitutes a crime is to explore the criminal illegality behind the behavior. For example, complex equity arrangements recognized in commercial law may have no barrier effect in criminal law. The boss behind the scenes may have nothing to do with the company on the surface, but as long as he can actually control the company and employees, he is a manager and leader in criminal law.

The understanding of virtual currency also depends on the essence behind it. Property in criminal law can be understood as property and items. In addition to tangible items that occupy physical space, property and property interests all belong to criminal law. property. As a typical property interest, virtual currency certainly belongs to property in the sense of criminal law. Especially since the "Notice on Preventing Bitcoin Risks" issued by five ministries and commissions in 2013 clearly defined virtual currency as a virtual commodity. This characterization has not changed in more than 10 years. Since it is a commodity, it certainly has property attributes.

02 Criminal filing of virtual currency theft, Trial standards strong>

After confirming that virtual currency has property attributes, whether it is stealing other people’s QQ coins or Bitcoins, if it meets the standards for criminal filing, the public security agency should file a criminal case. According to current regulations, once the amount of theft exceeds 3,000 yuan (standards vary among provinces across the country and may be lower in some areas), the public security organs should file a case. If the amount of theft exceeds 500,000 yuan, the perpetrator will be sentenced to more than 10 years or life imprisonment according to the conviction and sentencing standards, and the standard of 500,000 yuan is very high in virtual currency cases. Easy to reach.

In practice, the trial of criminal cases involving theft of virtual currency is different from traditional theft. Take the theft case of Luo Moumou as an example ((2020) Shanghai 0106 Xingchu No. 551). Luo Moumou illegally invaded the server of Shanghai Company A and stole more than 1.89 million USDT (market value of more than 12 million yuan). After that, Luo Moumou will USDT was converted into Ethereum (ETH) and Bitcoin (BTC), and part of the Ethereum was sold, making a profit of more than 900,000 yuan. Later, public security officers arrested Luo Moumou in Guangzhou City. In the end, the court determined that Luo Moumou had invaded Company A's computer information system, obtained the data stored in the system, secretly stolen more than 1.89 million USDT, and made illegal profits of more than 900,000 yuan. The same act violates two crimes: illegally obtaining computer information system data and theft. In the end, Luo Moumou was sentenced to 12 years in prison according to the conviction and punishment of theft, which carries a heavier penalty.

There are two important issues here: first, in cases of theft of virtual currency, the application of computer crimes (such as the crime of illegally obtaining computer information system data) and the crime of theft; second, the application of the crime of theft The issue of determining the amount.

As for the first question, common storage methods of virtual currencies include cold wallets, hot wallets and even direct storage in virtual currency exchanges. The perpetrators illegally obtained the system’s currency by intruding into the victim’s computer information system. If the data reaches a certain standard, it constitutes the crime of illegally obtaining computer information system data. Computer information system in criminal law is a very broad concept, as long as it has the function of automatically processing data. Whether it is a cold wallet, a hot wallet or a virtual currency exchange, the data processing system it contains certainly belongs to the computer information system under our country's criminal law; in addition, if the perpetrator makes more than 5,000 yuan or causes economic damage by invading and obtaining data, Loss of 10,000 yuan constitutes the crime of illegally obtaining computer information system data, and the sentence is not more than 3 years in prison; if the amount is more than five times the above (25,000 yuan, 50,000 yuan), the sentence is not less than 3 years but not more than 7 years. Imprisonment.

As for the second question, there is little controversy that theft of virtual currency constitutes the crime of theft, but how should the amount of theft be calculated: Is it the market value of the virtual currency at the time of theft? Or is it the amount of money that the perpetrator realized after stealing the virtual currency? Or the amount of money the victim originally spent to purchase the virtual currency? We see that the determination standard of the Shanghai No. 2 Intermediate People’s Court is the amount realized after the perpetrator stole the virtual currency. The main consideration of the court is that if the amount involved in the crime of theft is determined based on the amount that the victim initially spent to purchase virtual currency, it is equivalent to the court recognizing the exchange relationship between virtual currency and legal currency in disguise. At present, our country prohibits virtual currency and legal currency. The exchange business of legal currency; if the calculation is based on the market value of the virtual currency at the time of theft, firstly, the reference standard of the market value cannot be determined (whether it is based on one overseas exchange or multiple exchanges; whether it is based on the price on the day of the incident, or whether it is based on The average price in a certain period of time within the time of the incident, etc.). Secondly, calculating the price of virtual currency through market value also involves the issue of exchange between virtual currency and legal currency (The court is unwilling to disguise it as virtual currency and legal currency. Endorsement of the legality of exchanges between legal currencies).

In the end, the court chose to determine the amount of Luo’s theft based on the total profit of more than 900,000 yuan in ETH realized by Luo. Compared with the market value of all virtual currencies stolen by Luo (more than 12 million yuan), the amount involved in the case dropped. A lot, but because it still exceeded the "extremely huge amount" standard for the crime of theft (500,000 yuan, more than 10 years in prison), Luo was sentenced to 12 years in prison. However, let us assume a situation: Luo Moumou stole the virtual currency and did not perform any cashing operation. According to the standards of the Shanghai No. 2 Intermediate Court, it does not constitute the crime of theft, but only the crime of illegally obtaining computer information system data.

03 Victim Reporting Guide

For victims It is said that how to report the crime correctly is very important. In practice, many victims go to the police immediately after their virtual currency is stolen. Whether it is the police station or criminal investigation (some people even go to the economic investigation or public security), they will be more cautious in choosing whether to accept the case, making it even more difficult to file a case. Some public security agencies simply refuse to accept relevant cases on the grounds that virtual currencies are not protected by the state. In fact, the reasons behind this are very simple. Either the amount of loss is too small and the social harm is not great; or it is too difficult to detect, and failure to solve it affects the public security assessment; and some public security agencies do not have a good understanding of virtual currencies. Comprehensive, often viewed through colored glasses.

As a legal practitioner, it is difficult for lawyers to help victims directly recover their losses (lawyers have to hack into the other party’s wallet to help the victim get the coins back), but they can help the client legally safeguard their rights and file a criminal report. It is still possible to recover losses through civil litigation, civil litigation and other means. Based on Lawyer Liu’s experience, if the victim takes the following actions in a timely manner after his/her virtual currency is stolen, it is still possible to recover losses in the future:

( 1) Recall whether you have disclosed sensitive information such as mnemonic phrases and wallet passwords to others. If so, fix the person’s identity information in a timely manner: name, ID number, phone number, WeChat number, bank number, overseas software account information, etc.

(2) Whether you clicked on an unfamiliar link. If so, fix the link publisher’s information, operation process, chat information, various account information involved in the transfer process, etc. in a timely manner.

(3) For larger amounts (such as more than 1 million), it is recommended to entrust third-party institutions such as professional technology companies/security companies to conduct on-chain asset transfer and tracking analysis. For the above (1), (2) Verify the true information of the relevant accounts in the account and explain the value of the stolen virtual currency; if it involves the realization of the stolen virtual currency, the third-party institution can also trace the relevant addresses of the client and trustee during the realization operation, and the underlying Account information, etc.

(4) Evidence that the victim legally possesses virtual currency, such as purchase records, wallet details, etc.

The above operations can be performed by yourself or by entrusting a lawyer. After obtaining the above evidence materials as comprehensively as possible, and then preparing the report materials according to the material requirements of the criminal report, the possibility of being accepted by the police will be greatly increased. At the same time, it will also help the police to advance the case in a timely manner after it is filed. After all, the victim has done a lot of work for the police, so the possibility of recovering losses will also increase.