Legal attributes of Bitcoin and its criminal protection

Since judicial practice must respect the principle of legality of crime and punishment, which is the most basic value and principle of criminal law, virtual currencies such as Bitcoin shall not be recognized as property protected by my country's criminal law.

The absence of property criminal law pushes the protection of virtual currencies such as Bitcoin to information technology criminal law. In the case of stealing virtual currencies such as Bitcoin, the crime of illegally obtaining computer information system data can be applied for conviction and punishment.

As early as 2013, the People's Bank of China, the Ministry of Industry and Information Technology, the China Banking Regulatory Commission, the China Securities Regulatory Commission, and the China Insurance Regulatory Commission pointed out in the "Notice on Preventing Bitcoin Risks":

“Bitcoin…is not issued by monetary authorities, does not have monetary attributes such as legal tender and compulsory nature, and is not a real currency. In terms of nature, Bitcoin should be a specific virtual commodity, and financial institutions and payment institutions are required not to price products or services in Bitcoin, not to buy or sell Bitcoin or act as a central counterparty to buy or sell Bitcoin, not to underwrite insurance business related to Bitcoin or include Bitcoin in the scope of insurance liability, and not to directly or indirectly provide customers with other Bitcoin-related services.”

Coincidentally, in the same year when this regulatory opinion was issued, the US Securities Regulatory Department also warned of the risks of virtual currencies such as Bitcoin, and stated that it had jurisdiction over a Ponzi scheme case that was disguised as investing in Bitcoin. In addition, the US Securities Regulatory Department also warned of the trading risks of other virtual currencies.

However, facing the high-risk status of Bitcoin transactions, and limited by the limited definition of securities in the Securities Law, it is difficult for my country's securities regulatory authorities to effectively regulate Bitcoin transactions in accordance with the Securities Law like the US securities regulatory authorities. Therefore, the absence of departmental laws has resulted in the crackdown on Bitcoin violations falling on the Criminal Law.

Unfortunately, in my country, Bitcoin does not fall under the category of “property” in the criminal law. Article 92 of my country’s Criminal Law defines the scope of private property of citizens. It states:

"The term 'private property of citizens' as used in this Law' refers to the following property: (1) citizens' lawful income, savings, houses and other means of living; (2) means of production owned by individuals or families in accordance with the law; (3) lawful property of self-employed individuals and private enterprises; (4) shares, stocks, bonds and other property owned by individuals in accordance with the law."

It can be seen that Bitcoin, as a virtual currency, does not belong to any of the above four types of property. Even though the "Notice on Preventing Bitcoin Risks" defines Bitcoin as a "virtual commodity", due to the basic principle of "crime and punishment are legal", in criminal justice, the theft of Bitcoin cannot be identified as theft, and the fraud of Bitcoin cannot be identified as fraud. This is because the object of property crime should be the property stipulated in Article 92 of my country's Criminal Law.

The judges of the Supreme People's Court also uphold the principle of legality of crime and punishment, and believe that virtual currencies such as Bitcoin should not be recognized as property in the criminal law. Judges Hu Yunteng, Zhou Jiahai and Zhou Haiyang of the Supreme People's Court pointed out in the "Interpretation on Several Issues Concerning the Application of Law in Handling Criminal Cases of Theft" that:

"For the theft of virtual property, if it is indeed necessary to regulate it under the criminal law, it can be convicted and punished according to computer crimes such as illegal acquisition of computer information system data, and should not be treated as theft. The main considerations are: first, there is a clear difference between virtual property and tangible property such as money and property, and intangible property such as electricity and gas. Interpreting it as the criminal object of theft, "public or private property", is beyond the scope of judicial interpretation; second, the legal attribute of virtual property is computer information system data. The illegal acquisition of computer information system data can certainly be convicted and sentenced for the illegal acquisition of computer information system data; third, applying theft to the theft of virtual property will bring a series of thorny problems, especially the determination of the amount of theft, which currently lacks a generally accepted calculation method. The Supreme People's Court and the Supreme People's Procuratorate's "Interpretation on Several Issues Concerning the Application of Laws in Handling Criminal Cases Endangering the Security of Computer Information Systems" clarified the specific standards for conviction and sentencing for the crime of illegally acquiring computer information system data. The application of this crime can be used to punish the crime according to the crime and achieve the correspondence between crime, responsibility and punishment; fourth, from the perspective of foreign criminal legislation and judicial practice, it is rare to treat the theft of virtual property as theft."

It can be seen that since judicial practice must respect the principle of legality of crime and punishment, which is the most basic value and principle of criminal law, virtual currencies such as Bitcoin cannot be recognized as property protected by my country's criminal law.

Therefore, the absence of property criminal law pushes the protection of virtual currencies such as Bitcoin to information technology criminal law. Article 285 of my country's Criminal Law stipulates the crime of illegally obtaining computer information system data:

"Whoever violates state regulations by invading a computer information system other than that specified in the preceding paragraph (i.e., computer information systems other than those in the fields of state affairs, national defense construction, and cutting-edge science and technology) or adopting other technical means to obtain data stored, processed, or transmitted in such a computer information system, or exercising illegal control over such a computer information system, shall, if the circumstances are serious, be sentenced to fixed-term imprisonment of not more than three years or criminal detention and shall be fined or shall be fined alone; if the circumstances are especially serious, he shall be sentenced to fixed-term imprisonment of not less than three years but not more than seven years and shall be fined."

It can be seen that in the case of stealing virtual currencies such as Bitcoin, the crime of illegally obtaining computer information system data can be convicted and punished; however, in the case of Bitcoin fraud, the protection of the criminal law is absent. Faced with this dilemma and similar dilemmas, the author suggests that the scope of property stipulated in Article 92 of the Criminal Law can be supplemented by amending basic laws such as the Securities Law, such as expanding the scope of "securities". In this way, the supervision of virtual property is strengthened and the stability of the criminal law is maintained, which can be said to kill two birds with one stone.