On February 20, 2025, at the 19th "Zhiheng Shanghai Lecture Hall" hosted by the Criminal Law Department of Zhiheng (Shanghai) Law Firm, Liu Zhengyao, a senior lawyer in the web3 field, gave an in-depth presentation on " Refined Defense Strategies for Virtual Currency Criminal Cases " and discussed with fintech practitioners and legal professionals on site the defense practices of new criminal cases in the Web3.0 era.
1. Development trend of criminal cases involving currency
Lawyer Liu analyzed more than 5,000 criminal judgments involving virtual currency in databases such as Alpha and WestLaw, and concluded that the number of criminal cases involving currency has shown a significant growth trend since 2016. The three major outbreak nodes of criminal cases involving currency since 2016 are:
First, the increase in virtual currency ICO (ICO is the abbreviation of "Initial Coin Offering") activities in the mainland after 2015 led to a significant increase in the number of judicial documents in 2016;
Second, this led to the tightening of regulatory policies in 2017 when seven ministries and commissions issued the "Notice on Preventing Risks in Token Issuance and Financing", which further increased the number of cases;
Third, with the gray area controversy triggered by DeFi innovation in 2021 and the new forms of crime derived from Web3.0 technology in the past three years, the number of criminal cases involving currency has continued to increase. Lawyer Liu believes that there should be more actual judgment documents after 2021.
2. Definition of the Legal Attributes of Virtual Currency
At present, there is no general consensus in the legal theory community on the legal attributes of virtual currency, but it can usually be understood as the different boundaries between " digital currency " and " cryptocurrency ". In criminal cases, mainstream currencies are usually identified as property and are often the subject of property crimes in judicial practice. In addition, in certain cases, virtual currency may also be treated by judicial authorities as computer information system data.
3. Sharing of defense practice
Lawyer Liu combined his rich practical experience to elaborate on the common types of criminal cases involving currency. He mentioned that gambling crimes , fraud/theft , organizing and leading pyramid schemes , money laundering, and illegal business operations involving foreign exchange are all high-frequency crimes in criminal cases involving currency. Lawyer Liu combined his own cases to deeply explore the specific manifestations and legal application points of these crimes in different currency-related scenarios. For example, in gambling crimes, virtual currency may also be used as a payment and money laundering tool; in organizing and leading pyramid schemes, the perpetrators often form hierarchies, develop downlines, and recommend rebates in the name of blockchain and other projects, ultimately achieving the purpose of defrauding property. After analyzing common cases, Lawyer Liu started from three aspects: legal application, evidence defense, and procedural defense , and provided practical defense skills and strategies for the lawyers present.
In terms of the application of law , Lawyer Liu suggested that defense lawyers, in addition to mastering basic criminal substantive or procedural laws, should also understand the applicability of regulatory policies in defense and how to defend based on the latest judicial interpretations that have been issued.
In terms of evidence defense , Lawyer Liu suggested focusing on key links such as the correspondence between virtual currency wallet addresses and real people, the qualifications of judicial appraisal opinions and price assessment reports, the determination of the amount involved in the case, and the review and judgment of foreign-related evidence and electronic evidence.
In terms of procedural defense , Lawyer Liu shared his practical experience in case filing, jurisdiction, bail and non-prosecution of new cases. Lawyer Liu believes that some grassroots judicial organs are still not fully aware of virtual currency cases and may have made mistakes. Lawyers have a lot of room for defense in practice.
With the rapid development of the blockchain industry, criminal cases involving it are also increasing. Lawyer Liu’s sharing not only gave the legal colleagues present a more comprehensive and in-depth understanding of virtual currency criminal cases, but also provided new ideas and methods for lawyers in the field of criminal defense when handling such cases. If you are interested in the defense of virtual currency criminal cases, or want to learn more about related legal knowledge, please follow Lawyer Liu Zhengyao’s WeChat account.
