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Chinese Court Rules Ethereum As Legal Property

A court in Shenzhen city has passed sentence for an Ethereum theft case recently, ruling that Ethereum token is protected by law as legal property with ‘economic value’, and Chinese citizens are not barred from owning and transferring them.

Li, the defendant, took the position as a blockchain engineer of xinyijia company in Shenzhen in March 2019. In April 2019, Li participated in the a project named ‘Haode Star’ jointly developed by xinyijia company and the victim Haode Trade Co., Ltd. Li mastered the private key and payment password of the ‘Haode Star’ project.

Li resigned from xinyijia company on May 31 of the same year because he was assessed as an unqualified staff during the probation period. He was dissatisfied with the resignation, so on June 20, 2019, he used the private key and payment password of ‘Haode Star’ project that he had mastered, and logged into the account owned by Haode company in imToken, a crypto trading platform through mobile Internet to steal 3 ETH and 4 million Haode coins. On July 15 of the same year, Li stole 0.4 ETH from the account again. After that, the defendant Li transferred the stolen cryptocurrency and Haode coins to his account in OKEx and imToken.

According to the transaction records provided by the victim, the total value of the stolen ETH in the case worths more than 6000 Chinese yuan. After the crime, the defendant Li has returned all the stolen Haode coins and 0.4 ETH to the victim.

Finally Li, the defendant, was sentenced to seven months’ imprisonment and a fine of 2000 Chinese yuan. And he was ordered to refund 5536.99 Chinese yuan to the victim, Haode Trade Co., Ltd.

The case follows the identification method of property attribute in the sense of criminal law for bitcoin:

There are two ways to obtain ETH. Many people buy ETH by paying the corresponding fiat money. Some ETH is produced by mining. That is to say, Ethereum has both objective exchange value and subjective use-value.

Secondly, the concept of “property” originally includes property and goods. Therefore, property and property-related interests can be included in the concept of “property”.

China’s criminal law does not distinguish property from property-related interests, but only adopts the concept of “property”. In this case, we can think that the property in Chinese criminal law can include the narrow sense of property and property-related interests. Moreover, the extension of property must be increased with the development of society. In the case of a large number of virtual properties, there is no reason to deny that virtual property belongs to property, ETH is also listed here.

Finally, ‘the crypto assets represented by ETH have economic value and can be traded publicly’, which can be interpreted as the property will not exceed the prediction possibility of the national. Therefore, it is also in line with the principle of legality to recognize the ETH theft as theft.

In this case, when determining the specific amount, the court referred to the real-time price of some crypto trading platforms, and also took the opinions of the victim and the defendant as a reference.

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