Author: Lawyer Shao Shiwei

On December 5, 2024, the People's Court issued an article "Criminal Legal Characteristics of Illegal Stealing of Virtual Currency". The case described in the article is not particularly complicated. That is to say, after A stole B's virtual currency USDT, he sold it and obtained profit.

However, the court personnel’s comments on the case in the article gave people a chilling feeling, revealing: “Although I don’t understand blockchain, Virtual currency, but I think you should re-sentence!" The meaning makes people feel a little uncomfortable.

Let’s discuss the two points in this article.

01 Court opinion 1: USDT is obtained through mining, and the total amount is constant

About stealing from others Whether virtual currency should be charged with theft or illegal acquisition of computer system data has always been a controversial topic, and there has been no clear conclusion in trial practice. Therefore, this article is also a cliché, analyzing what crimes should be assigned to the defendant in this case. The author of the article believes that the crime of theft should be charged, which is understandable. However, the author believes that the basis for the conclusion that constitutes the crime of theft gives people a feeling of "the donkey's head is not the horse's mouth":

(Screenshot from the text)

As can be seen from the picture above, the author It is believed that in this case, virtual currency has characteristics such as scarcity and utility:

Scarcity: the total amount of virtual currency is constant and cannot be infinitely supplied;

Utility: reflected in the role of virtual currency Specific data encoding must be generated through "mining", and "mining" condenses social abstract labor;

Although but...the defendant in this case What people stole was USDT, not Bitcoin

(1) Is Tether currency scarce? The total amount is constant?

(Source: Thther official website)

USDT (Tether) is issued by Tether Limited A stablecoin designed to solve the volatility issues of traditional cryptocurrencies. The supply of USDT is also adjusted by Tether based on market demand. That is to say, the company will decide whether to increase the supply of USDT based on market demand.

In addition, Tether promises that each unit of USDT is backed by a reserve of US$1, so in theory, the additional issuance of USDT should also correspond to the additional issuance of its US dollar reserves. .

Currently, the price of BTC has exceeded 100,000 US dollars. Although we still have a negative attitude towards virtual currency investment, we have to admit that more and more people will choose Regarding Bitcoin as an investment asset, according to relevant data, the number one Bitcoin transaction is USDT. Therefore, the increase in demand for BTC will also increase the supply of USDT.

Therefore, the total amount of Tether coins is not constant but changes dynamically.

(2) Tether coins must be “mined” to be generated?

Whether a virtual currency relies on mining depends on the consensus mechanism it uses, the type of currency (such as stablecoins and non-stablecoins) and whether decentralized participants are required ( miners) to maintain the security and integrity of the network. Proof of Work (PoW) is the most common mining mechanism. Miners validate transactions and generate new blocks by competing to solve a complex mathematical problem (the hash problem). This process requires a large amount of computing resources and is usually completed by computer hardware (such as CPU, GPU or ASIC mining rig). Whenever a miner successfully solves this mathematical problem, they gain the right to generate a new block and add the transaction information in the block to the blockchain. Miners who complete this task are usually rewarded with a certain amount of cryptocurrency. For example, Bitcoin, Ethereum, etc. are virtual currencies that rely on mining.

USDT does not need to be generated or issued through mining because it is not a cryptocurrency generated through Proof of Work (PoW) or other mining mechanisms. currency. As mentioned above, USDT is a stable currency, and its issuance and destruction are controlled by Tether.

02 Court opinion 2: The defendant should choose a felony punishment

After demonstrating that the defendant's behavior constituted both the crime of theft and the crime of illegally obtaining computer system data, the author believed that the principle of punishment for a felony should be based on imagination and competition, so this case should be convicted of the crime of theft. p>

The law is strict, and a correct conclusion should not be drawn through a wrong reasoning process.

Moreover, it may not be absolutely correct to conclude that such cases constitute the crime of theft. After all, in a considerable number of cases, the trial judge did not recognize the value of virtual currency or simply avoided discussing whether virtual currency has any value. The issue of value directly determines the defendant's stealing of virtual currency as the crime of illegally obtaining computer information system data.

Yu Haisong, Director of the Criminal Division of the Research Office of the Supreme People's Court, also said, "When the prerequisite legal basis is unclear, having property attributes does not necessarily mean that it becomes property under criminal law, and it does not necessarily have to be applied to relevant behaviors. Property crime. ”

The crime of theft carries a maximum sentence of life, and the crime of illegally obtaining computer information system data carries a maximum sentence of 7 years.

;">Due to the judge's misunderstanding of the nature of the virtual currency involved in the case, he came to the conclusion that the defendant should be sentenced harshly, which is really difficult to convince the public.

In daily work, some consultants often equate virtual currency and Bitcoin with the same concept when asking lawyers because they do not understand virtual currencies. For example, the following is a question asked by a client when consulting lawyer Shao. According to the description, when the person involved contacted me on the phone, I realized that it was a mistake. It was 126,000 USDT that was frozen, not Bitcoin.

But if the judges also "misunderstand" like this, it would be really terrible. As the most severe legal method, criminal law is directly related to citizens' freedom, property and even life. Moreover, even if you don't speculate in currencies, you don't understand Blockchain, these conceptual distinctions can be easily understood by following Baidu, and are not particularly profound.

03 Digression

Thinking of a case that was held last month in a certain place where a virtual currency exchange was suspected of opening a casino. During the questioning session in the court, the judge stopped my colleagues and I from questioning the defendant several times and asked repeatedly : Are the questions you asked related to this case?

As a defense lawyer, during the court session, we made an extremely detailed list of questions to ask the defendant about the facts of the case. The reason is that the model and gameplay of this case are "the first in the world" and there is no precedent, but it must be demonstrated. Whether the model constitutes a prerequisite for gambling requires understanding the specific gameplay of the platform. This is the most basic. However, because the organizers do not understand the platform model, There are no relevant interviews recorded in the transcript, so the defender needs to ask questions in court to restore the relevant case facts. In this way, the court can fairly convict and sentence the defendant on the basis of ascertaining the facts of the case and listening to the defender's defense opinions. Only in this way can the parties accept the verdict and settle the case. Otherwise, even if it is the first instance verdict, the defendant will still appeal to the second instance and apply for a retrial.

In short, this world is a huge grassroots team, this is indeed true.