Zhengyi Net: Establishing Multiple Judicial Disposal Paths for Criminal Virtual Currency Cases, Exploring Measures of Realization, Destruction, and Return

According to Zhengyi Net, a publication under the People's Procuratorate Daily of the Supreme People's Procuratorate of China, an article titled 'Establishing Multiple Judicial Disposal Paths for Criminal Virtual Currency Cases' explores measures of realization, destruction, and return. The authors of the article are a member of the Party Committee of the Third Branch of the People's Procuratorate of Beijing, a senior researcher, a professor at the Law School of Capital University of Economics and Business, a doctoral supervisor, and a research assistant at the Center for Clean Governance and Rule of Law of Capital University of Economics and Business. The article points out:

Firstly, clarifying the legal status and role positioning of third-party institutions. Under the current legal framework, third-party institutions lack clear legal authorization to participate in the disposal of criminal property. In the future, legislation can authorize third-party institutions through a special program for the disposal of criminal property, incorporating them into the category of judicial auction assistants and granting them exclusive qualifications for one-time, targeted, non-public bidding. This role positioning not only clarifies the auxiliary role of third-party institutions but also limits their scope of participation, avoiding the risks of rent-seeking and market abuse.

Secondly, establishing a dual system of technical standards and procedural norms. To ensure the compliance and transparency of the disposal process, the Supreme Court and the Supreme Procuratorate, together with financial regulatory authorities, need to jointly issue dual standards for technology and procedures. In terms of technical standards, qualifications for bidding platforms should be clearly defined, including blockchain technology capabilities, data security guarantees, etc.; in terms of procedural standards, price evaluation methods should be standardized, requiring the use of the average price of the 20 days prior to the transaction date or the victim's acquisition cost as the benchmark to avoid subjective pricing; at the same time, a unified on-chain evidence format should be established to ensure the traceability of the circulation path of virtual currency; in terms of fund clearing paths, proceeds from realization should be directly transferred to a dedicated treasury account without passing through any third-party intermediary accounts, to prevent funds from flowing back into speculative channels.

Thirdly, strengthening the full-process connection of procuratorial supervision and rights protection. Supervision of the disposal process is crucial, and procuratorial organs can participate in the entire disposal process and implement dynamic supervision. Specifically, procuratorial organs can require third-party institutions to regularly submit progress reports on disposal, including on-chain tracking records, bidding processes, fund transfer vouchers, etc.; at the same time, they can establish a mechanism for informing rights and raising objections to ensure that persons involved in the case and bona fide third parties can promptly understand the disposal situation and raise objections. For objections, expert opinions can be organized or independent institutions can be commissioned to review, ensuring the fairness of the disposal results.

Fourthly, exploring differentiated disposal models to meet diverse needs. The disposal needs of criminal virtual currency cases are diverse. In the future, differentiated disposal models can be explored, using the principle of proportionality as a benchmark, with differential application of measures of realization, destruction, and return. For cases involving the return of property to victims, a targeted bidding realization model can be prioritized to ensure full reimbursement of proceeds, such as for stable coins not yet exchanged by victims of fraud, if they wish to return the original coins, they can be directly returned under specified conditions to avoid exchange rate losses; for cases involving the confiscation of prohibited items, destruction or technical sealing models can be used to prevent re-entry into the market, such as tokens specifically used for pyramid schemes or gambling, which may depreciate if forcibly realized due to poor liquidity and insufficient market depth, they can be legally destroyed and the destruction record can be included in the judgment. For high-value currencies where criminal proceeds have been mixed with legal investments, realization can be prioritized to maximize recovery. In addition, for cases with small amounts involved or difficult technical tracking, simplified disposal procedures can be explored, such as a comprehensive recognition model, where in cases where the circulation path cannot be fully traced, the value and ownership of the virtual currency can be determined based on relevant evidence. Procuratorial organs can hold a hearing before prosecution, listen to the opinions of victims, defense counsel, and financial regulatory representatives, and consider factors such as the types of currencies, market value, victim demands, and financial security, to choose the disposal method that minimizes harm to the parties involved, has the least impact on financial order, and is most effective in combating crime.

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