CoinWorld News Report:
Since the birth of virtual currency, the calculation of its price has been a controversial issue. Especially in the process of judicial proceedings, some practices in calculating the price of virtual currency involved in the case clearly violate relevant regulatory provisions. Today, Lawyer Liu will discuss the calculation of the price of virtual currency involved in the case based on his own experience in handling cases and the mainstream views in the theoretical and practical circles.
I. What are the ways to determine the price of assets involved in the case?
In traditional criminal cases, there are mainly the following ways to determine the price of assets involved in the case:
The first is to obtain a price determination report from a price determination center;
The second is through judicial accounting appraisal opinions or audit reports;
The third is to determine through intermediaries such as trading platforms;
The fourth is to determine based on the amount of loss suffered by the victim or the amount of profit obtained by the suspect/defendant.
It should be noted that in the judicial practice in recent years and in the theoretical field, there has been a basic consensus that mainstream virtual currencies have value in the sense of criminal law. Although China’s current laws only stipulate in Article 127 of the Civil Code that “if the law has provisions for the protection of data and network virtual property, it shall be governed by its provisions,” this is a general provision. However, in the “Notice on the Prevention of Bitcoin Risks” issued by five ministries in 2013 (Yinfa [2013] No. 289), Bitcoin was clearly classified as a “specific virtual commodity”. Since then, more than ten regulatory documents of various sizes have not denied this classification (some scholars believe that the “9.24 Notice” has substantively denied the value attribute of virtual currency, but Lawyer Liu holds a different opinion), so the determination of the price of virtual currency involved in the case has a certain degree of “official basis” (laws and regulatory documents).
The above different determination methods have their own advantages and disadvantages, but overall, the acceptance of judicial accounting appraisal opinions is higher than other types.
II. The particularity of calculating the price of virtual currency involved in the case
Virtual currency actually has property value, theoretically has a foundation to support its value, and has a certain basis in law. However, how to calculate the price of virtual currency involved in the case is still one of the most core and difficult issues in current criminal cases involving virtual currency (it is also the easiest breakthrough point for defense lawyers to find).
According to the “Notice on Further Preventing and Dealing with the Risks of Virtual Currency Trading Speculation” issued by ten ministries on September 15, 2021 (hereinafter referred to as the “Notice”), China’s regulatory authorities currently classify businesses that provide pricing services for virtual currency trading as “illegal financial activities”. Although the price appraisal of virtual currency involved in the case by appraisal agencies is not for the purpose of providing services for virtual currency transactions, judicial appraisal business is not a purely commercial activity of “if it is not prohibited by law, it can be appraised”, but a judicial activity with strict regulations on the scope and content of its appraisal business. At present, the determination of the price of virtual currency involved in the case by judicial appraisal agencies obviously exceeds their clear scope of appraisal.
Similarly, the methods of price determination and audit reports are also inconsistent with the current regulations in the “Notice”, and there are disputes of varying sizes in criminal justice practice.
The value of virtual currency itself fluctuates greatly in the market, and during the investigation and handling of cases, there may be significant differences between the high and low prices, and even the possibility of acquittal cases. For example, in a virtual currency fraud case, if the suspect Zhang San defrauds victim Li Si of one Bitcoin (BTC), the price of this BTC will determine Zhang San’s conviction and sentencing in the future. There are three situations to consider here:
The first is the price at which victim Li Si purchased the virtual currency involved in the case;
The second is the transaction price of one BTC in the virtual currency exchange at the time of the crime;
The third is the price of the virtual currency involved in the case when the suspect Zhang San committed the crime of selling stolen goods (i.e. the suspect’s profit).
The three different prices mentioned above determine the different degrees of Zhang San’s conviction and sentencing in the future. There are several prominent issues: when Li Si purchased BTC, the price may be less than 3,000 yuan (the minimum threshold for filing a case); the profit from Zhang San’s sale of BTC may be higher than 500,000 yuan (the starting point for a sentence of more than 10 years); as for the exchange trading price, which exchange and which period’s trading price should be used to determine the price of the virtual currency involved in the case, and so on.
III. Current judicial practices and mainstream views in the academic community
On the issue of whether virtual currency involved in the case has value, the practical and theoretical circles have basically reached a consensus that virtual currency has value and has the property attribute in the sense of criminal law, which can be presented in the form of price.
In terms of how to determine the price of virtual currency involved in the case, current judicial practices mostly rely on judicial appraisal opinions and audit reports, and some judicial authorities determine based on the transaction price of virtual currency exchanges.
In the academic community, some scholars advocate determining the price of virtual currency involved in the case based on the order of the purchase price, the price of selling stolen goods, and the market price (i.e. the exchange price) of the virtual currency involved in the case, on the basis of the principle of “no profit for the victim” (such as Professor Che Hao from Peking University Law School and Professor Sun Guoxiang from Nanjing University Law School).
IV. Conclusion
The reason why there are so many problems in current criminal cases involving virtual currency is essentially due to the conflict between the attitudes of regulatory authorities and judicial authorities towards virtual currency and the current situation where virtual currency has already begun to infiltrate people’s lives.
The law is not omnipotent. Since its inception, it has always lagged behind real life. But the law cannot be arrogant. When relying solely on legal interpretations and policy documents becomes difficult to maintain the balance of legal order, it means that the law urgently needs to change. As a criminal lawyer at the forefront of the cryptocurrency industry, Lawyer Liu increasingly feels that virtual currency should be treated systematically by the judicial system, rather than trying to regulate this technological change that is about to, or has already had a profound impact on human society, with a few departmental documents.
