Landing’s Crypto Crime Defense Series 7: How to Characterize the Theft of Virtual Currencies?

Landing Guangzhou, April 25, 2024, 18:01, Guangdong

In the "Internet+" era, the derivatives of electronic networks, such as gaming devices and game currency, are increasingly prevalent as virtual assets. Unlike real-world property, these electronic data existing online lack a concrete physical form, yet possess various use values, transaction values, and monetization values ​​found in the real world. Traditional theft typically targets public or private property. However, the theft of virtual assets is commonplace online. So, what crime should be charged with stealing such virtual assets? Let's look at the following case.

From August to November 2021, the defendant, Li, took advantage of his position providing computer network technology services to others at the Digital Industrial Park in Lanshan District, Linyi City, to illegally use the private key of Liu's EPK cryptocurrency wallet to intrude into Liu's computer system and steal a total of 208,075.96 EPK cryptocurrencies through transfer commands. Li then repeatedly sold the stolen EPK cryptocurrencies through cryptocurrency trading platforms, illegally obtaining 100,905.21 yuan.

The crux of the dispute in this case lies in determining the crime committed by the defendant, Li Moumou.

The first opinion holds that it should be prosecuted as theft. The reasoning is that virtual property exists on computer networks, occupies a certain space, and is an objectively existing object. From a physical perspective, virtual property can be controlled and possessed by a person, has a certain economic value, and can satisfy certain needs. From an economic perspective, the creation of virtual property also involves users spending a significant amount of time and money, possessing use value and worth. Although virtual property differs from traditional property, this does not preclude it from being protected by national law, making it an object of theft.

The second opinion argues that the act of stealing online virtual property should be considered the crime of illegally obtaining computer information system data. Firstly, virtual currency is not "property" in the criminal law sense but rather a form of "computer information system data." Because virtual property differs significantly from tangible property such as money and intangible property such as electricity, interpreting it as the object of theft—public or private property—exceeds the authority of judicial interpretation. Secondly, classifying the theft of virtual property as theft raises a series of problems, particularly regarding the determination of the amount stolen. Currently, there is a lack of universally accepted calculation methods, making it difficult for judges to determine the amount and thus posing a challenge when sentencing after a conviction of theft. Thirdly, not recognizing the property attributes of virtual property aligns with international practice. Therefore, classifying the theft of online virtual property as the crime of illegally obtaining data from computer information systems is more in line with the principle of proportionality between crime and punishment.

The court adopted the second opinion, believing that if the theft of virtual property truly requires criminal regulation, punishing it as the crime of illegally obtaining data from a computer information system would ensure the punishment fits the crime. After a lawful trial, the court found the defendant, Li, guilty of illegally obtaining data from a computer information system. Considering Li's voluntary surrender, return of the stolen money, and confession, a lighter sentence was deemed appropriate, and probation was applied. Therefore, the defendant Li was sentenced to three years imprisonment, suspended for four years, and fined.

The Supreme People's Court's "Research Opinions on How to Characterize the Illegal Sale of Others' Game Currency Using Computers for Profit" clarifies that the act of illegally selling others' game currency using computers for profit should currently be punished as the crime of illegally obtaining data from a computer information system.

Article 285 of the Criminal Law of the People's Republic of China states: Whoever violates state regulations by intruding into a computer information system other than those specified in the preceding paragraph or by using other technical means to obtain data stored, processed, or transmitted in such a computer information system, or by illegally controlling 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 may also be fined; 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 also be fined.