A publicly announced Bitcoin heist
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A publicly announced Bitcoin heist
Under the current legal framework, although cryptographic assets such as Bitcoin do not possess monetary attributes, they do have significant property value.
Navigating Web3 tides with focused insightsAuthor: Liu Zhengyao
Introduction
In recent years, with the development of blockchain technology, cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), and Tether (USDT) have become increasingly well-known. Although these assets manifest as "code" or "data," their inherent value, transferability, and exclusivity naturally confer upon them property characteristics. In China, regulations such as the September 4, 2017 "Notice" and the September 24, 2021 "Notification" explicitly prohibit virtual currencies from being used as legal tender and ban speculative trading in virtual currencies. However, in judicial practice, virtual currencies have been widely recognized as "specific virtual commodities" or "data-based property."
In the field of criminal justice, cases involving virtual currencies as either targets or tools of crime have risen steadily each year, most commonly involving fraud, theft, and computer-related offenses. However, direct robbery attempts using violence or coercion to obtain virtual currency—classified as "robbery-type" crimes—are relatively rare (while cryptocurrency-related extortion cases are more common). Thus, the 2021 Yichun, Jiangxi robbery case involving Lai and Xiang attempting to rob Bitcoin ((2022) Gan 09 Criminal Appeal No. 9) stands out due to its unique circumstances, complex legal classification, and high controversy. It has become a typical case in judicial practice and provides valuable reference for how encrypted assets should be legally characterized and sentenced in criminal cases.
I. Case Overview: From Recruiting Online to Arrest at a Hotel – A Failed Bitcoin Robbery Plot
According to information disclosed in court judgments, the case originated from Lai's losses in cryptocurrency trading. In May 2021, Lai learned that a certain "Teacher Peng" held at least five Bitcoins (then valued at approximately RMB 255,000 per coin) and conceived the idea of robbing several coins. Fearing he could not control the victim alone, Lai posted messages on Baidu Tieba to recruit accomplices.
Xiang responded to the post and contacted Lai. The two communicated privately via the messaging app "Feige" (Bat), where Lai detailed his robbery plan and promised Xiang 0.8 BTC upon success. Xiang then took a high-speed train from Changsha to Yichun to meet Lai and checked into a hotel with him. Inside the room, they devised a detailed plan: at least four people would be recruited; Lai would lure Teacher Peng to a remote location under the pretense of investment, one person would drive, and the other three would use plastic zip ties to restrain Teacher Peng and any companion, then demand access to his Bitcoin account and password.
To prepare for the robbery, Lai even collected seven plastic zip ties near the hotel. He continued contacting online acquaintances such as "Magic Cube," "Hunjianglong Batihu," and "Peach" who expressed interest in joining the crime. However, before all accomplices arrived, police, acting on intelligence, located and arrested both men on the afternoon of May 11, ending the criminal plot before it began.
The first-instance court ruled that both individuals were guilty of robbery and sentenced Lai to three years and Xiang to one year in prison, with fines. Both appealed. The appellate court determined the case occurred during the preparation stage of robbery, caused no actual property loss, and lacked proper assessment of Bitcoin’s value. As a result, Lai's sentence was reduced to one year and six months, and Xiang's to nine months—a significant reduction.
II. Can Robbing Bitcoin Constitute the Crime of Robbery?
A key point of contention in this case is whether attempting to rob Bitcoin constitutes the crime of robbery under China's Criminal Law.
The effective court ruling clearly answered—yes, it does.
Under Chinese law, robbery refers to seizing public or private property through violence, threats, or coercion. While Bitcoin is fundamentally an encrypted data string based on blockchain technology, it possesses exchangeability, transferability, and real-world market value—meeting the three core attributes of "broadly defined property": manageability, transferability, and value.
The Yichun Intermediate Court (the appellate court) cited the 2013 "Notice on Preventing Bitcoin Risks" issued by the People's Bank of China and other departments, which defines Bitcoin as a "specific virtual commodity." Though lacking legal tender status, it remains a form of "data-based property" protected under law. Therefore, robbing Bitcoin does not escape the elements of property crime merely because it exists in digital form. The offense still infringes upon another person's property rights—no different in essence from robbing cash or a mobile phone.
Although Lai and others had not yet begun the actual act of robbery, their actions constituted preparatory acts. Having gathered zip ties and formulated a detailed plan, they met the criteria for an attempted robbery under the Criminal Law. Based on guidelines including the Supreme People's Court's "Guiding Opinions on Several Issues Concerning the Application of Law in the Trial of Robbery Cases," the court ultimately found them guilty of robbery but imposed a mitigated punishment.
III. Sentencing Rules in Virtual Currency Crimes: The Key Lies in Valuation of the Property
Sentencing for robbery depends not only on the method of action but also on the amount involved. How to value encrypted assets like Bitcoin remains one of the major challenges in judicial practice.
The first-instance court relied on the real-time market price of Bitcoin at the time of the incident (about RMB 255,000 per coin), concluding that since the defendants intended to steal at least one Bitcoin, the amount qualified as "particularly huge," warranting a heavier sentence. However, the appellate court reasoned otherwise: first, the crime had not progressed to the execution phase, and no property was actually obtained; second, there is no legal domestic trading market for Bitcoin, making price determination uncertain; third, sentencing for robbery should be based on the actual amount seized, not speculative values during the planning stage.
The appellate court emphasized that valuation of virtual currencies and other encrypted assets should follow the principle of loss compensation—that is, victim's actual loss should serve as the primary basis. This includes consideration of the following factors:
(1) Victim's Purchase Price: Given priority, as it best reflects actual loss.
(2) Exchange Price at Time of Incident: If purchase records are unavailable, reference may be made to real-time prices on foreign exchanges at the time of the offense.
(3) Resale Price: If available, can serve as supplementary evidence.
The court also stressed that while China does not recognize Bitcoin as legal tender, it does not prohibit private ownership or transfer. Therefore, a victim’s possession of virtual assets is lawful, and any resulting losses deserve legal protection.
Ultimately, the appellate court decided against applying enhanced penalties for "huge sums" and instead handed down lighter sentences based on the danger, methods, and realistic risks associated with the preparatory stage of the robbery. This approach reflects the judiciary’s rationality and caution when dealing with novel forms of property crime.
IV. Conclusion: The Future Legal Protection of Cryptographic Assets
This judgment not only sets a precedent for future cases involving virtual currency robbery but also sends a clear signal: the property nature of virtual currencies is now widely accepted within China’s criminal justice practice.
Within the current legal framework, although cryptocurrencies like Bitcoin lack monetary status, they undeniably possess substantial property value. Whether through fraud, theft, illegal control of computer systems, blackmail, or violent robbery, any act committed with the intent of unlawful possession will be treated as a property crime.
As the digital economy deepens, criminal cases involving cryptographic assets will grow more diverse, presenting new challenges and controversies for judicial authorities. Going forward, laws should further clarify the legal status of virtual currencies, establish standardized market valuation methods, and define clearer boundaries between data and property rights—building a more unified and stable system of judicial rulings. Of course, Web3 lawyers must also deepen their understanding of cryptography and blockchain beyond traditional legal knowledge to better serve their clients.
It is foreseeable that cryptographic assets will receive increasing legal recognition and protection—and any violation of holders’ legitimate rights will be strictly punished according to law.
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