Report: Chinese Court Classifies Bitcoin as a "Virtual Property" in Theft Case
In a groundbreaking dictum on May 6, a criminal court in Shanghai, China, classified Bitcoin as “virtual property,” pertaining to a now-concluded theft case from 2018.
China calls Bitcoin "Virtual Property"
As reported by local publication Baijiahao Baidu, Shanghai’s No.1 Intermediate People’s Court earlier considered Bitcoin as “foreign property” as complainants sought compensation for damages on a Bitcoin theft case tracing back to 2018.
Determining Bitcoin as “virtual property,” the court stated any stolen and forcibly-obtained cryptocurrency must be returned to its lawful owners either immediately or a massively discounted price.
The two-year-long case started when four locals allegedly attacked an American expat and his Chinese wife, identified as Pete and Wang Xioli respectively, at the latter’s apartment in Shanghai. The robbers, led by one Yan Dong, tied up the couple and demanded the transfer of 18.88 Bitcoins and 6466 Skycoin, a cloud-based cryptocurrency.
Converted to market prices at the time, the robbery was worth over US$ 200,000. But considering Bitcoin’s volatility, the loot fluctuated between low six figures to over a million dollars if the accused cashed out.
At the first hearing in late-2018, the courts considered the matter as an “economic dispute,” owing to the lack of legal framework regarding cryptocurrencies globally. No evidence of the motive of theft existed, but the four accused agreed to return the stolen digital assets to Pete and Xioli.
However, the transfer never happened. After months of waiting, Pete and Xioli filed another lawsuit in 2019, requesting legal authorities to notify Yan and his accomplices to return the crypto-assets. This time, the couple even waived off the recompensation of Skycoin, instead asking for all the 18.88 Bitcoins to be returned.
But Yan Dong had other plans. He stated the lack of cryptocurrency laws and the state’s negative view of digital assets meant the loot was unduly valued according to price data on CoinMarketCap, the world’s largest crypto price tracker. As per Yan, the price data was not relevant to an uncategorized asset in China and hence did not hold true. Additionally, as Bitcoin was not legal property, the supposed “return” of stolen crypto was unrequired.
To Pete and Xioli’s relief, the Shanghai court stated:
“The infringement occurred in our country, both parties' regular residences are in our country, and the parties have not agreed to choose the law applicable to the dispute, so this case applies our law as the law governing the case.”
The court added if the accused could not return Bitcoin, they must compensate the complainants at RMB 42,206 per Bitcoin, a figure both Yan and Pete seemed to agree with.
Despite China’s lack of crypto framework, the country has stepped with lawful judgments in similar criminal cases. As Blockchain.News reported in In 2019, the local courts of Hangzhou considered Bitcoin a “virtual property” in a case involving a now-defunct crypto exchange and its estranged users.
(Image Courtesy of Bangkok Post)