BitJungle: Best Practices for Public Security to Handle Virtual Currency Legally and Comply

With the development of blockchain technology, virtual currencies are widely used around the world, but they are also used by criminals to commit crimes such as fraud, money laundering, and illegal fundraising. When handling virtual currency cases, public security organs face many legal, technical, and cross-border law enforcement challenges. In particular, due to the characteristics of virtual currencies such as high liquidity , large value fluctuations, and difficulty in custody , public security organs often need to take prompt disposal measures after seizing virtual currencies. This article will explore the main difficulties faced by public security organs in virtual currency cases and provide legal and compliant best practices.

I. The main difficulties faced by public security organs in handling virtual currency cases

1. Difficulties in case filing, characterization and legal application

At present, my country's laws and regulations on virtual currencies are constantly updated, but there is still a lack of targeted criminal law regulation. When investigating cases, public security organs usually file cases based on crimes such as fraud, illegal business operations, organizing pyramid schemes, and money laundering in the Criminal Law, but specific cases may involve multiple charges, making it difficult to determine the nature of the crime.

2. Transaction anonymity and traceability are difficult

Virtual currency transactions rely on blockchain technology and use a decentralized method to transfer money. Some currencies (such as Monero and Zcash) are also anonymous, which increases the difficulty of tracing funds. In addition, criminals use methods such as jumping wallets, multiple address transfers, and currency mixing services (Tornado Cash) to hide the flow of funds, further increasing the difficulty of investigation by public security organs.

3. It is difficult to seize funds

The suspects cleverly hid their virtual currency assets by storing them in wallet accounts. During the investigation of the case, the public security organs often found it difficult to obtain mnemonics or private keys, which made it impossible to directly seize the relevant wallets. In addition, the private keys of some hidden addresses may be held by multiple suspects. Even if the funds are found to be deposited, how to effectively seize them is still a huge challenge.

4. Fund freezing poses many challenges

In the case where it is impossible to obtain private keys to directly seize assets, freezing funds becomes a more feasible measure. However, unlike traditional bank accounts, public security organs cannot directly freeze the virtual currencies involved in the case through banks, but need to rely on exchanges or stablecoin issuers (such as Tether and Circle) to assist in freezing. This requires not only the provision of legal and compliant judicial documents, but also an in-depth understanding and precise application of blockchain technology to ensure the effectiveness of the freezing measures.

5. Lack of compliance channels for judicial disposal

In the judicial disposal process, there is still a lack of unified regulations on how to deal with frozen virtual currencies in accordance with the law. Even if the public security organs successfully freeze the virtual currencies obtained from crimes, there are still many uncertainties in the subsequent compliance realization (such as sale, auction) and return to the victims. Due to the characteristics of virtual currencies such as high liquidity, it is crucial to rely on a complete, compliant and executable virtual currency processing solution to improve the efficiency of asset processing in virtual currency cases.

2. Suggestions on regulations for handling virtual currencies

In order to maximize the value of the assets involved in the case, public security organs usually need to initiate disposal procedures as soon as possible within the scope permitted by law to ensure that virtual currency can be reasonably realized or processed under appropriate market conditions.

1. "Opinions on Further Standardizing the Disposal of Property Involved in Criminal Proceedings"

The opinion clearly states that for specific property involved in the case, especially those with difficult storage conditions and large market price fluctuations , the public security organs may handle them in advance in accordance with the law. In particular, in the management of high-risk assets such as virtual currencies, this provision provides the public security organs with a legal basis for flexible handling.

2. Provisions on the Procedures for the Handling of Criminal Cases by Public Security Organs

The regulation provides clear guidance on the disposal of property involved in the case, pointing out that when asset management is difficult and the storage costs are too high , the public security organs may handle it first within the legal procedures.

3. Measures for the Management of Confiscated Property

Although the main focus is on the management of confiscated property, it also involves assets with large market price fluctuations, difficult to keep or excessively expensive , which can be dealt with first in accordance with the law.

4. Several Provisions on the Management of Property Involved in Cases by Public Security Organs

The regulation further strengthens the management mechanism of the property involved in the case, and clearly states that when the property has high liquidity or the management cost is too high , prior handling measures should be taken in a timely manner.

These regulations fully reflect the clear attitude and determination of laws and regulations to preemptively deal with assets involved in cases that have large price fluctuations, are difficult to preserve, and have excessively high storage costs.

III. Best Practices for Public Security Organs in Handling Virtual Currency Cases

Based on the above difficulties in handling cases, how to enhance the improvement of blockchain technology and blockchain traceability, how to handle legal and compliant cases, and improve case handling efficiency. BitJungle Technology Co., Ltd. was established in 2018 and has been deeply involved in the field of blockchain security, focusing on blockchain traceability and asset compliance.

The Zhong Kui system independently developed by BitJungle combines big data analysis, machine learning and multi-chain cross-validation technology to achieve efficient and accurate blockchain asset tracking. By studying domestic and foreign regulatory policies, the company has established a legal and compliant virtual currency processing channel to ensure efficient execution of the entire process from chain tracing, risk identification to final asset compliance disposal, helping to improve case handling efficiency and provide the industry with professional blockchain security solutions.

BitJungle's virtual currency processing solution focuses on the following advantages:

●As a partner of a licensed exchange in Hong Kong, China, BitJungle Technology Co., Ltd. strictly follows international regulatory standards, Chinese laws and regulations, and anti-money laundering regulations to ensure that all operations are compliant and safe.

● With rich experience in solving cases, BitJungle independently developed the Zhong Kui big data platform, which provides multi-dimensional blockchain fund analysis capabilities and greatly reduces the analysis threshold for case handlers. At present, the system has been put into use by public security organs in many places, providing strong technical support for law enforcement.

●The company has deep roots in the blockchain security field and possesses strong capabilities in solving complex blockchain cases, and can efficiently execute cross-border asset loss recovery, key clue breakthroughs, and evidence acquisition. Its corporate business team can provide on-site case analysis support and has successfully assisted the public security in solving many major cases, including cases supervised by the Ministry of Public Security. It also empowers law enforcement agencies through the Zhong Kui system to achieve full-process blockchain case-solving capabilities from 0 to 1 .

●At the same time, the company implements a margin system to ensure the absolute safety of assets to be processed by public security organs. It can guarantee asset disposal transactions worth tens of millions at one time, helping to improve the ability to manage funds safely.

●BitJungle has always been committed to creating compliance solutions that are traceable, auditable , and provide professional support for law enforcement agencies and financial security.

3. Final Thoughts

With the increase in virtual currency cases, public security organs face multiple challenges in law enforcement, such as the application of law, fund tracking, asset disposal, and cross-border cooperation . To improve the efficiency of solving blockchain cases, it is necessary to continuously improve laws and regulations , and with the technical support of blockchain security companies such as BitJungle , rely on the "Zhong Kui" big data system to improve the traceability and fund analysis capabilities on the chain, so as to promote case investigation more efficiently, and through the BitJungle virtual currency processing solution, ensure that the disposal of the virtual currency involved is legal, compliant, and safe.