Encryption Asset Crime Cases Trigger Legal Qualification Disputes

Recently, a theft case involving millions of encryption coins has attracted attention in Shanghai. This case not only reveals the complexity and risks in the field of encryption assets but also exposes the discrepancies in our country's legal characterization of encryption assets.

In May 2023, a resident of Shanghai, Mr. Ou, discovered that the cryptocurrency worth millions in his wallet had suddenly "vanished". After an investigation, Mr. Ou found that someone had transferred all his cryptocurrencies a month ago. Through technical analysis, Mr. Ou discovered that there was a "backdoor" program in the wallet he used that could automatically obtain private keys.

In August 2023, a certain Ou submitted a criminal complaint to the public security organs and successfully initiated a case. Subsequently, the criminal suspects Liu, Zhang 1, and Dong 2 arrived at the case one after another. All three of them were senior front-end development engineers at a certain platform, responsible for the development of the wallet. They admitted to implanting a "backdoor" program in the wallet to illegally obtain users' private keys and mnemonic phrases.

However, the case took a turn. During the investigation, the prosecutor discovered that it was another former employee, Zhang 2, who actually transferred the victim's encryption currency. In July 2021, Zhang 2 implanted a program in the client code to collect user private keys and mnemonic phrases, and in April 2023, transferred the encryption currency from a wallet belonging to Ou.

Finally, the People's Court of Xuhui District, Shanghai, sentenced four defendants to three years of fixed-term imprisonment for the crime of illegally obtaining data from a computer information system, along with fines. Among them, Zhang certain 2 was sentenced to three years in prison and a fine of 50,000 yuan after compensating the victim for part of the losses and obtaining forgiveness.

This judgment has sparked controversy in the legal community. Some argue that the case should be convicted and punished for embezzlement, which would more accurately assess the defendant's subjective intent and objective behavior. The sentencing range for embezzlement is wider, with a maximum penalty of life imprisonment, while the maximum sentence for illegally obtaining data from computer information systems is seven years.

By analyzing the criminal judgments related to encryption assets in recent years, it has been found that there are two views in our country's courts regarding the nature of encryption assets: one believes that encryption assets are not property, while the other believes that encryption assets have property attributes. In recent years, the latter view has gradually become mainstream, with most cases acknowledging that encryption assets can be the object of property-related crimes.

This case reflects the inconsistency in the identification of the nature of encryption assets in judicial practice. With the development of blockchain technology and the maturation of the encryption asset market, the legal community hopes to more precisely define the legal attributes of encryption assets to provide clearer and more unified guidance for judicial practice.