Chain Law: Bitcoin Can Be Targeted for Fraud

In previous articles, Chain Law has analyzed whether the theft of Bitcoin constitutes the crime of theft. (Chain law research｜Theft of Bitcoin does not constitute theft?)

Although the case mentioned in this article occurred before the September 4th Announcement (Chain Law Research｜The September 4th Announcement that has been misinterpreted), the court’s views on "Bitcoin property attributes" and "the way to determine its value" have great significance. reference value.

Case information:

First instance: The First People's Court of Dongguan City, Guangdong Province (2015) Dong Yi Fa Xing Chu Zi No. 2596

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o1 Judgment Gist

3. Although our country emphasizes the control and risk prevention of Bitcoin, it has not banned it. Article 127 of the newly promulgated "General Principles of Civil Law" stipulates that "if the law has provisions on the protection of data and network virtual property, follow its provisions." Although there are no detailed rules, there is already a concept of protection of network virtual property at the macro-legislative level . No matter from the point of view of life practice or the appellant's huge benefits from it, it is in line with common sense to recognize Bitcoin as public and private property in the sense of criminal law.

1. Although Bitcoin is data in terms of physical attributes, in real life, it is universal and disposable, can be traded publicly, and has strong circulation. It can also be realized through professional trading platforms, and has high property value. value;

2. Bitcoin is different from game currency and game equipment. Although the current Supreme Court’s opinion on the theft of virtual property such as game coins and game equipment is to convict and punish computer crimes such as illegally obtaining computer information system data, the main purpose is to solve the problem that game coins exist in a small range (limited to in-game), price, etc. Difficult to determine, etc., but Bitcoin does not have these problems. There are obvious differences between Bitcoin and game currency, game equipment, etc., and there is a big gap between the two in terms of scope of use, audience, tradability, and value determination;

3. Although our country emphasizes the control and risk prevention of Bitcoin, it has not banned it. Article 127 of the newly promulgated "General Principles of Civil Law" stipulates that "if the law has provisions on the protection of data and network virtual property, follow its provisions." Although there are no detailed rules, there is already a concept of protection of network virtual property at the macro-legislative level . No matter from the point of view of life practice or the appellant's huge benefits from it, it is in line with common sense to recognize Bitcoin as public and private property in the sense of criminal law.

Chain lawyer team point of view:

1. Regarding the property attributes of Bitcoin, in the first domestic Bitcoin infringement dispute case represented by the Chain Law team, the court pointed out in the reasoning for the judgment that Bitcoin has the value, scarcity, and controllability that property needs to possess as an object of rights. property, its virtual property attribute should be identified.

First of all, Bitcoin has the economy or value of property. Through the process of "miners" and "mining" and the acquisition of labor products, Bitcoin condenses human abstract labor, and can be transferred, traded, and generated through money as a consideration. , Corresponding to the property that the holder actually enjoys in real life, it has use value and exchange value;

Secondly, Bitcoin has the scarcity of property, its total amount is constant at 21 million, and its supply is limited. As a resource, it is difficult to obtain and cannot be obtained at will;

Finally, Bitcoin has the exclusivity and controllability of property. As property, it has clear boundaries and content and can be transferred and separated. Its holders can possess, use and obtain benefits from Bitcoin.

2. Bitcoin is very different from virtual assets such as game currency and game equipment. The latter can be regulated in accordance with the "Interim Measures for the Administration of Online Games" and other documents. In addition to the obvious differences in the scope of application, audience, tradability, and value determination In addition, Bitcoin is also obviously different from game currency in terms of decentralization and usage.

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o2 Case brief

In early August 2014, defendant Pei used his laptop to surf the Internet, purchased a website with the domain name "Bitcoin.cc" on the Internet, created a forum with the content of investing in Bitcoin, and then used the nickname "Shovel". "Shovel"'s QQ posted advertisements in some Bitcoin QQ groups, falsely claiming that the website has generous interest and rewards for depositing Bitcoins, in order to attract others to transfer Bitcoins to the website.

Afterwards, Pei contacted the victim Zhu, who followed the guidance of "shoveling" and contacted the recharge customer service QQ of the "Bitcoin.cc" website on August 3, 2014 (the customer service QQ was also operated by Pei). Then, from August 3 to 10, 2014, a total of about 183.8 bitcoins (about 668,100.134 yuan) were transferred to the bitcoin website provided by the customer service, and 10,000 yuan was transferred to Pei. Cheat 678,100.134 yuan.

At the same time, Pei used the same method to defraud the victim Sun of 9.47 bitcoins (about 34243.52 yuan). After succeeding, Pei deleted the source code of the website on August 10, 2014, transferred the URL to an announcement document page edited by him on Baidu Netdisk, and announced that the website was attacked and the bitcoins in the website were stolen. It cannot be recovered if stolen. After that, Pei transferred the defrauded bitcoins to multiple websites, transferred all of them to his account on the www.okcoin.com bitcoin trading website, sold all the bitcoins, and withdrew them to the bank card bound to him. After that, it is consumed for various purposes and basically spent.

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o3 Procuratorate's point of view

1. The first-instance judgment found that Pei constituted a crime of fraud and the fact that the amount was particularly huge was clear, and the evidence was indeed sufficient. The appellant, Mr. Pei, has the subjective purpose of illegal possession; Bitcoin, as a virtual property, has exchange value, which meets the provisions of "other property" in Article 92 (4) of the Criminal Law, and it is included in the crime of fraud The category of "public and private property" does not exceed the possibility of the people's predictions, and does not violate the principle of legally prescribed crimes and punishments.

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o4 The main point of view of the court of second instance

1. Bitcoin should be recognized as property in terms of legal attributes.

1. Bitcoin has value. In real life, Bitcoin has already existed as a property with great value. Some people provide "mining machines", some people invest a lot of human and financial resources in Bitcoin "mining", some people build trading platforms, some people engage in transactions, etc.; Not recognized by the public as data of its original physical properties, but pursued as wealth. No matter from the perspective of open market transactions or the criminal proceeds of the appellant in this case, Bitcoin undoubtedly has a relatively high value.

2. Bitcoin can be controlled and publicly traded by the general public. At present, there are professional Bitcoin trading websites both internationally and domestically, and the general public can hold Bitcoin and participate in transactions. In this case, the appellant finally realized the bitcoin through domestic and foreign trading platforms.

3. Although the state emphasizes the control and risk prevention of bitcoin transactions, it does not prohibit them. Bitcoin is different from game currency and game equipment. The two are quite different in terms of the scope of existence, value determination, contact with the crowd, and degree of tradability. No matter from the perspective of life practice or the huge benefits obtained by the appellant in this case, it is common sense to recognize Bitcoin as property.

To sum up, this court does not accept the relevant opinions of the appellant and the defender that Bitcoin is not the criminal object of the crime of fraud.

2. Regarding the determination of the value of Bitcoin in this case.

After the incident, the Price Certification Center of the Dongguan Price Bureau replied and approved the bitcoin prices on August 4, 2014 and August 10, 2014, respectively.

The defender filed an objection and applied for review during the examination and prosecution stage. After review by the Price Certification Center of the Guangdong Provincial Development and Reform Commission, the Price Certification Center of the Dongguan Price Bureau revoked the verification of the reference price of the property involved in Bitcoin (the date of the incident in August 2014 10), and re-approved the price of Bitcoin on that day.

This court holds that the price certification issued by the Price Certification Center of the Guangdong Provincial Development and Reform Commission was issued by a qualified institution in accordance with legal procedures, with sufficient grounds and no inappropriateness, and should be accepted;

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o5 case reviews

According to the criminal law of our country, whoever defrauds public or private property, if the amount is relatively large, shall be sentenced to fixed-term imprisonment of not more than three years, criminal detention or surveillance, and shall also be sentenced to a fine; if the amount is huge or there are other serious circumstances, he shall be sentenced to fixed-term imprisonment of not less than three years but not more than ten years and a fine; if the amount is particularly huge or there are other particularly serious circumstances, the sentence is to be not less than ten years of fixed-term imprisonment or life imprisonment, and a fine or confiscation of property shall also be imposed.

In the above judgment:

First, the court recognized Bitcoin as public and private property in the sense of the criminal law, which complies with the definition of public and private property in the sense of the criminal law. For example, Professor Zhang Mingkai believes that property as the object of property crimes should have three characteristics, namely, the possibility of management, the possibility of transfer, and the value, and Bitcoin undoubtedly has all these three points.

Second, confirm the value of Bitcoin through a legal price appraisal agency. In particular, it needs to be emphasized that since the key to sentencing is the value of the property involved in the case, for example, according to Beijing's regulations, the largest amount of fraud is 5,000 yuan, and the huge amount is 100,000 yuan. In this case, when pricing the bitcoins involved, the price on the "date of the incident" shall prevail in terms of time.

It can be said that such a case not only conforms to the principle of adapting the crime to the criminal responsibility, but also effectively punishes the criminal behavior, and provides a reference for the handling of related criminal cases involving Bitcoin in the future.

In our previous article (Chain Law Research｜Theft of Bitcoin does not constitute the crime of theft?), we have emphasized that: in the case of defrauding Bitcoin, the perpetrator uses fraudulent means to defraud others of Bitcoin, because the perpetrator has no intrusion, illegal Controlling the computer system does not meet the crime of illegally obtaining computer information system data, and the perpetrator cannot be held criminally responsible. Another example is that the perpetrator uses violence, coercion and other means to force the bitcoin owner to transfer the bitcoin to the perpetrator's account. Since the perpetrator also does not have intrusion or illegal control of the computer system, he cannot be held criminally responsible. However, the jurisprudence involved in this article avoids such a situation.