Analysis | Is stealing Bitcoin theft or illegal acquisition of computer information system data?

In recent years, while Bitcoin has been favored by investors, it has also become a target for many criminals to make profits, and criminal cases involving Bitcoin have occurred frequently. Using "Bitcoin" as the keyword, a total of 1,095 criminal case legal documents were retrieved from the Judgment Documents website, and 339 criminal case legal documents were retrieved using "theft" and "Bitcoin" as the keywords.

After comparison, it is found that the courts in various places have different judgments on the theft of Bitcoin. Due to the differences in the nature of Bitcoin, there are two different charges in the judgment: theft and illegal acquisition of computer information system data. This article combines the criminal act of stealing Bitcoin to compare and analyze whether the theft of Bitcoin constitutes the theft crime and the illegal acquisition of computer information system data crime.

1. Theft

1. Legal interests infringed

Criminals who steal Bitcoins will be convicted and sentenced by judicial authorities in some regions for theft. The main reason for determining that the act of stealing Bitcoins constitutes theft is that the legal interests infringed are virtual property.

The crime of theft[1] refers to the act of stealing a large amount of public or private property, stealing repeatedly, breaking into a house, stealing with a weapon, or pickpocketing public or private property for the purpose of illegal possession.

In civil judicial practice, Bitcoin is often treated as virtual property, that is, it has property attributes. This has also led to judicial authorities in some regions adopting the civil field’s definition of Bitcoin in the field of criminal law. Bitcoin is recognized to have property attributes, and it has the ability to be managed, transferred, and has value[2].

Specifically, natural persons or organizations can manage the bitcoins they possess; natural persons or organizations can trade and transfer the bitcoins they possess, and criminals who steal bitcoins can similarly transfer and possess bitcoins; finally, bitcoin has corresponding exchange value and use value, and investors can use the bitcoins they hold to purchase goods for trading.

Judicial authorities in some regions have determined that the object of infringement of Bitcoin theft is the ownership of public and private property. As a special Internet commodity, Bitcoin has its cash value and is legal property held by others. Theft of Bitcoin is regulated by the crime of theft.

2. Sentencing rules

In combination with Article 264 of the Criminal Law[3] and Article 1 of the Interpretation of the Supreme People’s Court and the Supreme People’s Procuratorate on Several Issues Concerning the Application of Law in Handling Criminal Cases of Theft[4], if the value of theft of public or private property is more than RMB 1,000, the public security organs will file a case for investigation.

In cases of Bitcoin theft, how do we determine the value of the stolen Bitcoins?

In actual cases, it is easier to identify the proceeds of crime when the stolen Bitcoins are converted into RMB. However, if the stolen Bitcoins are not converted into cash, the judicial authorities will often persuade the criminals to entrust others to convert them into RMB, and then the price center will jointly apply for appraisal by both parties to determine the amount of illegal proceeds.

In the absence of mitigating circumstances such as surrender or confession, the minimum sentencing standard for stealing Bitcoin is imprisonment of not more than three years, criminal detention or control, and the statutory maximum penalty can be life imprisonment.

II. Crime of Illegal Acquisition of Computer Information System Data

1. Legal interests infringed

Judicial authorities in some regions classify Bitcoin theft as a crime of illegally obtaining computer information system data, and believe that the legal interest infringed by Bitcoin theft is the country's social management order.

Article 285 of my country's Criminal Law stipulates that the crime of illegally obtaining computer information system data and illegally controlling computer information systems refers to the act of violating state regulations, intruding into computer information systems other than those in the fields of national affairs, national defense construction, and cutting-edge science and technology, or adopting other technical means to obtain data stored, processed, or transmitted in the computer information system, and the circumstances are serious.

Since the essential attribute of Bitcoin is data existing in a computer network, investors who own the private key of Bitcoin will own the Bitcoin at the corresponding address. Judicial authorities in some regions are more conservative and define Bitcoin as valuable computer data that is protected. Article 127 of my country's Civil Code protects both computer data and network virtual property, but does not make specific provisions on the relationship between computer data and virtual property, their respective definitions and coverage.

Therefore, protecting Bitcoin as computer data only exists in the criminal field, and can only be criminally traced when the standard for filing a case of illegal acquisition of computer information system data is reached, without affirming the value of its virtual property. Stealing Bitcoin is stealing some valuable computer data held by others.

2. Sentencing rules

Article 285, Paragraph 2 of my country's Criminal Law stipulates the sentencing standards for the crime of illegally obtaining computer information system data:

"Whoever commits this crime shall be sentenced to fixed-term imprisonment of not more than three years or criminal detention and shall be fined or fined alone; if the circumstances are especially serious, he shall be sentenced to fixed-term imprisonment of not less than three years but not more than seven years and shall be fined."

Article 1 of the Interpretation of the Supreme People's Court and the Supreme People's Procuratorate on Several Issues Concerning the Application of Laws in Handling Criminal Cases Endangering the Security of Computer Information Systems stipulates that the following circumstances shall be deemed as serious circumstances:

① Obtaining more than ten sets of identity authentication information for online financial services such as payment settlement, securities trading, and futures trading;

② Obtaining more than 500 sets of identity authentication information other than those in ①;

③ Illegal control of more than 20 computer information systems;

④ Illegal gains of more than 5,000 yuan or economic losses of more than 10,000 yuan;

⑤Other serious circumstances.

In cases of stealing Bitcoin, the most common methods are: 1. installing unfamiliar compression software on the computer, and using the software to steal a certain amount of Bitcoin in the victim's wallet; 2. illegally obtaining a large amount of data containing citizens' computer information, writing computer programs to perform "database collisions", and performing batch comparisons of data to verify matching computer email accounts and passwords, log into the victim's account to trade Bitcoin, and divide the spoils after cashing out.

Judicial authorities mainly determine whether the stolen Bitcoin is "serious" and subject to investigation based on the amount of identity authentication information obtained and the amount of illegal income. When the circumstances of stealing Bitcoin are particularly serious, the maximum sentence is 7 years in prison.

It can be seen that the maximum statutory penalty for stealing Bitcoins as the crime of illegally obtaining computer information systems is seven years in prison, while the maximum statutory penalty for stealing Bitcoins as the crime of theft is life imprisonment. Different judicial authorities have different determinations of the nature of the crime of stealing Bitcoins, which will also have a certain impact on the sentencing of the defendant.

When it is confirmed that the defendant has committed a crime and the public prosecutor has brought charges for theft, the defense attorney can look for evidence to move closer to the lower-sentencing crime of illegally obtaining computer information system data.

References

[1] See: Article 264 of the Criminal Law, which provides that whoever steals a large amount of public or private property, or commits theft multiple times, burglary, theft with a weapon, or pickpocketing, shall be sentenced to fixed-term imprisonment of not more than three years, criminal detention or public surveillance, and shall also or shall only be fined; 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 shall also be fined; if the amount is especially huge or there are other especially serious circumstances, he shall be sentenced to fixed-term imprisonment of not less than ten years or life imprisonment, and shall also be fined or have his property confiscated.
[2] Chu Chencheng & Ma Shili, Criminal Law Protection of Bitcoin: An Analysis from Doctrine to National Policy [J], Journal of Chongqing University (Social Science Edition), No. 12, 2019.
[3] Same as note [1]
[4] See: Article 1 of the Interpretation of the Supreme People’s Court and the Supreme People’s Procuratorate on Several Issues Concerning the Application of Law in Handling Criminal Cases of Theft, which provides that theft of public or private property with a value of more than RMB 1,000 to RMB 3,000, more than RMB 30,000 to RMB 100,000, or more than RMB 300,000 to RMB 500,000 shall be deemed to be “a relatively large amount”, “a huge amount” or “an extremely huge amount” as provided for in Article 264 of the Criminal Law.

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