Author: Deng Jianpeng, PhD in Law, Professor, Doctoral Supervisor, School of Law, Central University of Finance and Economics; Li Chengyu, PhD Candidate, School of Law, Central University of Finance and Economics. The author thanks the reviewers for their valuable revision suggestions, and the author is solely responsible for the content of the article.
This article was published in Financial Regulation Research, Issue 3, 2025, pp. 37-51.
I. Introduction
On September 4, 2017, the release of the Announcement on Preventing Risks in Token Issuance and Financing (hereinafter referred to as the 94 Announcement) officially started the process of strict supervision of blockchain finance and crypto assets in my country. Although a series of financial rectification efforts have reduced the domestic trading boom and partially eliminated speculative risks, some domestic investors still buy and sell crypto assets through over-the-counter transactions and overseas platforms (Deng Jianpeng and Li Chengyu, 2024b), and civil disputes caused by the trading, lending, financial management or entrusted investment of crypto assets continue to occur. In particular, mainstream private crypto assets such as Bitcoin, Ethereum and Tether are used by criminals for overseas transactions and even criminal activities, and have become the focus of my country's fight against money laundering, fraud and other crimes (Wu Yun et al., 2021).
With the in-depth application of blockchain technology in many fields, the impact of crypto assets on the existing legal system and theory and the related practical problems caused by it are increasing (Huang Zhen and Ma Wenjie, 2024). The soaring number of lawsuits and the amount involved show that crypto assets have become an important type of property that cannot be ignored in my country's judicial activities. However, in the judicial field, the phenomenon of "different judgments for the same case" continues to occur (Deng Jianpeng and Zhang Xiaming, 2023), indicating that there are differences among judicial officers on the judgment standards, resulting in a large contrast in the conviction and sentencing of various cases (Lai Zaoxing, 2022), and a large number of crypto assets involved in the case have not been properly disposed of (Yang Kai, 2024), which has affected the credibility of my country's judicial system. The fundamental reason for the above judicial dilemma is that there is no law in my country that clearly defines the legal attributes of crypto assets, and judicial officers have long been troubled by disputes such as property theory and data theory. At the same time, the normative documents such as the "94 Announcement" and the "Notice on Further Preventing and Dealing with the Risks of Virtual Currency Trading Speculation" (hereinafter referred to as the "924 Notice") jointly issued by the People's Bank of China and other departments pointed out that crypto assets do not have legal compensation, compulsory, and monetary attributes, and should not and cannot be circulated and used as currency in the market. A large number of judicial judgments, influenced by the above-mentioned financial regulatory policies and judicial spirit (represented by the Supreme People's Court's Guiding Case No. 199), began to deny the property attributes of crypto assets, and made different and vacillating interpretations of the law based on different cognitions, which ultimately led to only some cases being successfully concluded with the return of property or severe punishment, while a considerable number of cases were not accepted, the lawsuit was rejected, or the relevant behavior could not be accurately determined to constitute what kind of crime, and failed to be dealt with fairly, which seriously affected the predictability and seriousness of judicial judgments.
Given that judicial practice is an important way to establish emerging rights practices (Meng Rong, 2023), this article will sort out the identification ideas of my country's judicial organs on the legal attributes of crypto assets based on many cases involving crypto assets, analyze the policy reasons for the relevant judicial cognitive dilemma in recent years, and the shortcomings and limitations of different judicial cognitions such as "property theory" and "data theory", and rethink and demonstrate the property attributes of crypto assets to solve the difficulties of crypto asset value assessment and the existing dilemma of judicial trials, and achieve an effective "dialogue" between legal theory and judicial practice, while providing academic thinking for the adjustment of future financial regulatory policies.
Second,Judicial analysis of the legal attributes of crypto assets
First, the property theory. Some courts recognize the property attributes of crypto assets such as Bitcoin and Ethereum, and some courts further point out that from the current laws and administrative regulations, my country does not prohibit individuals from holding and legally transferring crypto assets, so it can also be presumed to be a virtual commodity with restricted circulation. Second, the non-property theory. Contrary to the above view, some courts pointed out that Bitcoin and other "civil law objects" that are not clearly defined by laws and regulations deny the property attributes of crypto assets, and the related investments and transactions engaged in by citizens are not protected by law. Third, the data theory. The third mainstream view holds that the legal attribute of crypto assets is computer information system data. Therefore, in criminal trials, the criminal behavior of the defendant's illegal acquisition of crypto assets may infringe on both property interests and computer information system management order interests, and the related criminal activities can be identified as the crime of illegally obtaining computer information system data.
To sum up, the legal characterization of crypto assets in my country's judicial judgments can be roughly divided into three types: "property theory", "non-property theory" and "data theory". The above views are inadequate to solve the problem of characterization, and it is easy for judicial personnel to fall into endless debates, resulting in different judicial institutions having difficulty in forming consistency in their judicial positions, trial ideas and judicial effects on crypto assets. First, the property theory emphasizes that crypto assets have economic value, disposability, scarcity, and tradability, which conform to the basic characteristics of property. The application of property rights rules to configure the rights and obligations of the parties, or the conviction and sentencing of property crimes, has a higher efficiency of judicial relief. However, the above viewpoints only partially extract some characteristics of crypto assets, and the understanding of its concept is still stagnant in the initial stage. It is unable to explain the virtuality, illegality, and prohibited pricing of crypto assets, which are far from traditional property, so that the "property theory" and the "non-property theory" are arguing endlessly. In addition, there are still many judicial personnel who have failed to deal with the identification of property attributes in detail.
Secondly, the "non-property theory" refuses to protect crypto assets as property on the grounds of their non-substantial and illegal nature. In this process, the negative evaluation of crypto assets by financial regulatory policies has become an important basis for judgment. Many judicial judgments, based on the above-mentioned "announcements" and "notices" and other administrative normative documents, believe that crypto assets do not have legal circulation and should not be regarded as property. However, the above-mentioned document states that "it should not and cannot be used as currency in the market", rather than a comprehensive ban on the trading and circulation of all functions and types of crypto assets, especially it does not explicitly deny the property attributes of crypto assets. Therefore, some judicial officials directly deny the legitimacy and property attributes of the crypto assets involved without proving whether they play the role of currency. This is an expansive interpretation and excessive understanding of financial regulatory policies, without sufficient legal basis and unconvincing. On the other hand, the application of lower-level administrative normative documents such as the "94 Announcement" and the "924 Notice" in judicial judgments is suspected of going beyond the trial according to the "law". In particular, using such administrative normative documents as "pre-laws" that affect criminal trials obviously undermines the rule of law spirit of "crime and punishment are legally prescribed" in the criminal law. Therefore, the above-mentioned administrative normative documents cannot be used as a basis for determining the property attributes of crypto assets (especially in the criminal field). From this point of view, the "non-property theory" lacks formal legal support.
Finally, the "data theory" has obvious argumentation flaws. Its denial of the property attributes of crypto assets brings more difficulties in conviction and sentencing. The results of practice show that if we abandon the evaluation of the property attributes of crypto assets, deny the legal currency pricing mechanism, and barely resolve judicial disputes through the "data theory", the judgment will be full of loopholes and will not live up to public expectations, especially for some cases where crypto assets are used as criminal tools or objects, such as bribery, money laundering, robbery, fraud and illegal fundraising, etc. From this point of view, defining crypto assets with "data" does not help to settle disputes and effectively convict, sentence and punish crimes.
Third, suggestions for solving the dilemma of judicial identification of crypto assets
First, clarify the property attributes of crypto assets. Among the three positions of "property theory", "non-property theory" and "data theory", "property theory" is quite reasonable, but crypto assets have undergone subversive innovations in physical form and operation mode, which poses a great challenge to traditional property rights theory. In the global blockchain financial practice over the past decade, based on the different value mechanisms and market performance, crypto assets can be roughly divided into three categories: (1) private crypto assets generated by encryption technology, with a constant total amount and issued on the public chain, represented by Bitcoin; (2) stable coins pegged to a certain legal currency or other asset value, represented by Tether and USDC; (3) crypto assets that imitate the technical architecture of mainstream tokens but have a smaller market size and popularity, including a large number of copycat coins and air coins that have no physical support, no global social consensus or application scenarios.
Overall, the above three types of crypto assets all exist in the form of electromagnetic data and do not have a physical form. They do not meet the definition of "things" in the Civil Code, and the courts should not adopt the view of "property rights" to deal with related judicial disputes. However, some mainstream crypto assets and stable coins issued on the public chain should be defined as new types of network virtual property in the judiciary, such as Bitcoin, Tether (pegged to the US dollar at a one-to-one ratio) and other crypto assets. The reasons are: (1) some crypto assets and stablecoins have real assets as value support, or have been recognized and accepted by a large number of participants around the world, and have a strong global social consensus, thus having higher and more certain value attributes; (2) the total issuance of some crypto assets or stablecoins is constant, or the market price is maintained by a one-to-one peg to the US dollar; (3) crypto assets and stablecoins issued on public chains can verify and disclose transaction information through blockchain technology, and disclose to the outside world the holder's possession of specific crypto assets, which can form a stable property right ownership.
However, some crypto assets issued on alliance chains, private chains, or still run on traditional computer systems, their issuers often lack sufficient funds or a global social consensus system as value and credit support, and do not have a completely tamper-proof and decentralized ledger system, which may be difficult to meet the general characteristics of property. Those "air coins" that have no application value, scarcity, or are false and exaggerated are suspected of fraud and should not be recognized as property in the legal sense.
Second, reconstruct the pricing rules. my country's current financial regulatory policies prohibit the use of legal currency to calculate the price of crypto assets, which means that it is impossible to determine the amount of property return or the amount of crime, which constitutes an obstacle to the conviction and sentencing of crimes involving crypto assets. Although some courts support the protection of crypto assets as the legal property of citizens, due to policy bans, they can only sentence "return of the original property" and cannot replace it with legal currency. However, due to the technical impossibility of forced transfer of crypto assets, some cases have to terminate the execution procedures, which ultimately leads to the failure of the goal of property protection.
It can be seen that financial regulatory measures have deterred the crypto market, but have also affected the identification of the property attributes of crypto assets and weakened the feasibility of property protection. Under the principle of "anything is allowed unless prohibited by law", my country still has a huge demand for crypto assets that has not been eliminated by the market, and a large number of property rights disputes have arisen that need to be resolved by the courts. Crypto assets are new types of network virtual property. Their supervision cannot only focus on the restriction and control of risks, but also be sufficiently inclusive of the protection of legal property. It is necessary to leave room for legal pricing work in financial regulatory policies, return crypto assets to their property status, and eliminate obstacles in judicial trials and enforcement.
Therefore, my country may consider re-formulating the price evaluation rules for crypto assets. In current judicial practice, if the parties have an agreement on the transaction amount and the amount of deduction, the court may directly make a judgment based on the valuation results recognized by both parties. In some criminal cases where the sale of stolen goods has been completed, the court may refer to the amount of profit made by the defendant from the sale of crypto assets for conviction and sentencing, but the valuation standard based on the price agreed by both parties or the amount of stolen goods sold is not universal. A more common and convenient approach is to refer to the valuation standards of laws and judicial interpretations such as the "Civil Code" and the "Interpretation of the Supreme People's Court and the Supreme People's Procuratorate on Several Issues Concerning the Application of Laws in Handling Criminal Cases of Theft" to judge the amount of infringement damages or crimes based on the "market price at the time of the act". At present, there is no qualified institution in my country that specializes in the evaluation of crypto asset prices, and some authoritative platforms in the industry are not information intermediaries recognized by my country, and cannot provide appropriate price data for judicial trials. The 924 Notice explicitly prohibits the provision of information intermediary and pricing services for crypto asset transactions. Domestic trading platforms are banned, and courts can only refer to the price information provided by overseas trading platforms. However, this may support overseas platforms in providing trading services to domestic citizens through the Internet, exacerbating the risk of crypto asset speculation. At the same time, such fair market prices spontaneously formed by the private sector are difficult to confirm. There are price differences between different trading platforms. A large number of unregulated trading platforms have fabricated false trading quotations and manipulated the rise and fall of crypto asset prices. From the perspective of assisting judicial work, my country can consider establishing a professional crypto asset judicial disposal agency, relying on the technical services of legal third-party institutions such as industry associations and technology platforms, to carry out crypto asset data crawling and price index research and development. At present, the market price index of the top compliant platforms in Hong Kong, China and other countries can be used as a reference to provide objective and definite pricing references and amount standards for all parties to the litigation and the referees. This article is a concise version, and footnotes and references are omitted.
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