The Dilemma of Value Determination in Virtual Money Cases

In recent years, the number of criminal cases involving Virtual Money has been on the rise. In addition to common complex cases such as money laundering, fraud, and pyramid schemes, disputes over Virtual Money between individuals have also gradually increased. These cases provide useful insights for the defense and investigation of related criminal cases.

This article will explore the issue of value determination in criminal cases involving Virtual Money through a fraud case triggered by an investment dispute.

Case Summary

Between June and July 2018, Zheng deceived Wang into investing in a blockchain project in Chaoyang District, Beijing, and fraudulently obtained 32 coins and over 1000 coins from Wang. Zheng resold the obtained coins for a profit of over 1.64 million yuan. After the incident, Zheng voluntarily surrendered.

The court found that Zheng, with the aim of illegal possession, fabricated facts to defraud others of property, with a particularly large amount involved, constituting the crime of fraud. Ultimately, Zheng was sentenced to ten years in prison and fined 200,000 yuan.

The Dilemma of Valuing Virtual Money

In cases of fraud or fundraising fraud involving Virtual Money, accurately determining the amount involved is a key issue. In practice, there are various approaches, such as using the purchase price paid by the victim, the selling price by the criminal suspect, the market trading price, or the evaluation price from third-party institutions as the basis.

However, the Chaoyang District Court in Beijing clearly pointed out in this case: "The value of Virtual Money is influenced by national laws and regulations as well as industry regulatory policies, and should not be directly determined in individual cases." The court ultimately used the defendant Zheng's proceeds from selling stolen goods, which amounted to over 1.64 million yuan, as the amount involved in the case.

Policy Background and Practical Dilemmas

In September 2021, regulatory policies jointly issued by multiple national ministries classified activities related to Virtual Money as "illegal financial activities," which includes providing pricing services for Virtual Money trading. This policy has sparked controversy in judicial practice.

Some viewpoints argue that the judicial authority or its entrusted third-party agencies conducting price assessment falls under judicial activities and is not restricted by the aforementioned ban. Another viewpoint believes that this policy is a comprehensive prohibitive regulation and does not grant exemptions for judicial activities; therefore, the pricing actions of judicial authorities may also violate current regulatory policies.

Solution Approach

The practice of the Chaoyang District Court provides a feasible solution: in principle, there is no proactive determination of the value of the involved Virtual Money. In cases where there is a recovery amount, this should be prioritized to determine the amount involved. If there is no recovery amount, consideration can be given to determining in the order of purchase price, cash disposal amount, or judicial appraisal amount.

Only when it is impossible to determine the amount involved by other means, and that amount is crucial for conviction and sentencing, will the judicial authorities possibly take the initiative to price the virtual money involved.

Conclusion

The challenges that virtual money poses to the law are unprecedented. This predicament stems from the limitations in regulators' understanding of virtual money, who attempt to comprehensively control it through simple regulatory documents. However, this not only fails to achieve the intended effect but also causes numerous difficulties for enforcement and judicial activities.

To thoroughly address this issue, it is necessary to revise the relevant regulatory policies. How to revise them and the specific content of the revisions need further discussion.