FX168 Financial News Agency (Asia Pacific) reported that heavy news regarding the regulation of virtual currency in China has been announced. According to research on digital asset disposal, since early 2024, the Legal Affairs Brigade of the Beijing Municipal Public Security Bureau has made the management of virtual currency involved in criminal cases a key focus of annual law enforcement standardization construction, actively researching related policy regulations and formulating guiding norms. In February, the Legal Affairs Brigade organized multiple joint meetings and themed salons.
The Beijing Municipal Public Security Bureau invited leaders from various related departments to conduct in-depth discussions on the investigation, litigation, management and disposal of virtual currency cases, aiming to improve the effectiveness of combating virtual currency-related crimes, explore innovative management paths, and promote the standardization and efficiency of law enforcement practices.
(Source: WeChat official account)
The Legal Affairs Brigade of the Beijing Municipal Public Security Bureau's official government public account, Faqingyuan, mentioned in an April report that China's current legislative bodies and administrative authorities have adopted a"illegal for trading, legal for holding" policy towards virtual currencies, mainly based on principle provisions. Thus, a complete legal regulatory system for virtual currency management has not been formed, resulting in a lack of sufficient legal justification for law enforcement in practice.
Brigade leader Xiao Song emphasized that they should dare to take the lead and explore innovation when establishing relevant systems for managing virtual currencies involved in criminal cases.
He pointed out, that based on the relevant provisions of the Ministry of Public Security and combined with Beijing’s actual situation, the Legal Affairs Brigade recently produced normative regulations related to the management of virtual currencies involved in criminal cases. Clear work principles regarding handling virtual currency cases have been defined, and every link in the virtual currency investigation process, such as verification, extraction, storage, and disposal, has been further detailed with standard requirements. This effectively integrates professional police investigation resources, and jointly improves the efficiency of investigating and tracking funds in virtual currency-related crimes.
He continued, "In addition, we must comprehensively strengthen supervision and management, adhere to the combination of internal and external supervision, strict discipline, and strictly avoid problems such as profit-based law enforcement and the risk of corruption."
The Digital Asset Disposal Research official public account commented that "from official sources, the management of virtual currency involved in criminal cases has attracted high attention from the Beijing Public Security Bureau. Just before and after this report was released, the Beijing police cracked down on a series of virtual currency-related cases worth 2 billion. The disposal of large amounts of virtual currency has always been a widely concerned issue. Should virtual currency involved in criminal cases be disposed of or realized? How to dispose of it? How does restitution through realization affect sentencing? These issues deserve further study."
"In fact, the disposal of property involved in criminal cases during the public security investigation stage includes at least two levels: returning the original item directly to the victim and auctioning it off to realize its value. However, in judicial practice, some local public security organs use auction realization methods to indirectly determine the value of virtual currency to confirm the amount involved, rather than returning it directly to the victim."
Recently, scholars pointed out in their research that for virtual currency cases that are simple and have uncomplicated ownership issues, virtual currency can be directly returned to the victim. The essence of returning the original value is a transfer between two virtual currency wallets, which can be designed with a one-click return function in the virtual currency investigation platform of public security agencies. After law enforcement personnel complete related legal procedures and determine the return method, they can promptly return it through the investigation platform, and improve the regularity and efficiency of virtual currency restitution.
The article also mentioned, "In designing the realization function of virtual currency, since there is currently a lack of legal realization institutions in China, and relevant laws and regulations lack a clear realization process guideline, it can attempt to use a police-enterprise cooperation method, where through platform operation, partner enterprises can realize virtual currency overseas, and then gradually transfer it into the victim's account through the RMB Settlement process when re-entering the country to be returned to the victim."