[Introduction] The author has represented many criminal prosecution and defense cases in the cryptocurrency circle. In such cases, in addition to being concerned about the legal characterization of the suspects' behavior, the parties also pay special attention to the early freezing measures and subsequent judicial disposal of the virtual currency involved. This is because, although many judgments in judicial practice do not recognize the financial attributes of virtual currency, and the illegal acts of fraud, theft, and robbery of virtual currency are uniformly regulated as computer crimes, the motive and purpose of the defendants in the above crimes are the considerable property value attached to the virtual currency, and the victims are most concerned about whether the virtual currency they lost can be returned to the original owner. Therefore, in criminal cases in the cryptocurrency circle, the virtual currency involved has both property and evidence attributes. In judicial practice, most investigative agencies freeze the suspect's virtual currency wallet to preserve the property and evidence involved. However, due to the unclear legal attributes of virtual currency, the legal basis and legitimacy of the investigative agency directly freezing the virtual currency account need to be further clarified. The author analyzes the procedural issues of freezing and puts forward suggestions for improvement.
1. Conceptual Analysis and Legal Basis of Freezing Virtual Currency Accounts Article 144 of the Criminal Procedure Law of the People's Republic of China stipulates: "The People's Procuratorate and the public security organs may, in accordance with the provisions, inquire into and freeze the deposits, remittances, bonds, stocks, fund shares and other properties of criminal suspects according to the needs of investigating crimes. Relevant units and individuals shall cooperate." It can be seen from this article that the freezing measures of the People's Procuratorate and the public security organs are aimed at "property". However, since 2013, my country has issued a series of documents such as the "Notice on Preventing Bitcoin Risks", prohibiting financial institutions and payment institutions from conducting virtual currency-related businesses. Many courts believe that virtual currency does not have property value, and crimes involving virtual currency are not regulated as property crimes, but are sentenced as computer crimes based on the characteristics of virtual currency as electronic data. If virtual currency cannot be identified as property in the criminal law, then it certainly does not belong to the property that can be subject to freezing measures as stipulated in Article 144 of the Criminal Procedure Law, and the public security organs' freezing of virtual currency accounts lacks legal basis. Therefore, electronic data freezing measures have arisen under the background of the continuous development of new Internet technologies and the dilemma of the difficulty of directly extracting the electronic data involved in the case. In 2016, the Supreme People's Court, the Supreme People's Procuratorate and the Ministry of Public Security issued the "Regulations on Several Issues Concerning the Collection, Extraction, Review and Judgment of Electronic Data in Handling Criminal Cases" (hereinafter referred to as the "Electronic Data Regulations"), which created the electronic data freezing system for the first time with reference to the traditional property freezing system. According to Article 12 of the "Electronic Data Regulations", freezing electronic data is to lock the network application account, so that the account user or owner cannot log in to the Internet and enter the network application platform through the original password, and prevent them from adding, deleting, and modifying electronic data, so as to achieve the purpose of preserving electronic data. The introduction of this regulation provides a legal basis for freezing virtual currency accounts. However, there are difficulties in linking this regulation with the procedural provisions of criminal proceedings and the substantive provisions of the criminal law. The freezing of virtual currency still needs further legal interpretation in practical applications.
2. The defects of the legal basis for freezing virtual currency accounts In the field of criminal proceedings, freezing is a compulsory measure taken against criminal property that can be used as evidence, which is a way of collecting and fixing evidence after the seizure of criminal property. After the release of the "Electronic Data Provisions", freezing criminal electronic data refers to a compulsory investigative measure taken by the investigative agency to make the electronic data that can be used as evidence in a state where it cannot be collected or is inconvenient to collect after the criminal electronic data carrier is seized or the network user account is sealed. At present, the use of this investigative measure still has problems such as breaking through the semantic concept of freezing, insufficient procedural provisions, and imperfect remedial measures. (I) Freezing electronic data breaks through the semantic concept of "freezing" The Criminal Procedure Law limits the applicable objects of freezing to the deposits, remittances, bonds, stocks, fund shares and other properties of the suspect. Virtual currency is not clearly defined as property in the sense of criminal law, so it is subject to freezing measures as electronic data due to its evidentiary attributes. However, understanding freezing measures as the preservation of evidence involved in the case may break through its original semantic boundaries. The author found through searching that during the formulation of the "Electronic Data Provisions", there was a great controversy over the choice of "freezing" or "seizure". After consulting the Legal Affairs Committee of the National People's Congress, it was clarified that seizure and freezing are investigative measures of the same nature and effect. The only difference between the two is the applicable objects. Seizure is mostly used for property and documents, and freezing is mostly used for deposits and other properties. For electronic data, the Legal Affairs Committee's opinion is that both are acceptable. Later, considering that freezing is not applicable to the preservation of tangible objects, but mainly applicable to abstract objects or behaviors, the freezing measure is applied to the preservation of virtual and intangible electronic data. The birth of the freezing of electronic data measures takes into account the evidentiary attributes of electronic data, but there are two inappropriate aspects: first, the "Criminal Procedure Law" has not yet been amended, and the objects of freezing are expanded to non-property electronic data. The application of the "Criminal Electronic Data Provisions" conflicts with the superior law. Although this form of prior amendment of the inferior law is not uncommon in my country's legislation, it is still suspected of conflict between the superior and inferior laws;Second, I have represented a case of embezzlement involving virtual currency. The purpose of the victim's application to the police to freeze the defendant's virtual currency account was to preserve property and prevent the defendant from cashing out the virtual currency when he was released on bail, resulting in the loss of property that should have belonged to the victim. This case shows that in practice, the focus of freezing virtual currency accounts is still on its property attributes. The current situation of virtual currency having property value cannot be changed by the law's non-recognition. At this time, judicial practice still insists on not recognizing the property attributes of virtual currency, and chooses to freeze it as electronic data in a roundabout way, which goes against the original intention of freezing.
(II) Incomplete provisions on freezing procedures
At present, my country's electronic data freezing is in its infancy, and the relevant procedural regulations are not yet perfect. Freezing is a property preservation measure, and its applicable objects are mainly the deposits, remittances, bonds, stocks, fund shares and other properties of criminal suspects. However, the means and objects of freezing electronic data are different, and the traditional "Criminal Procedure Law" and "Supervision Law" cannot be directly applied.
The "People's Procuratorate Criminal Procedure Rules" and other laws and regulations have provisions on freezing. As for the newly issued regulations, there are some imperfections. First, the freezing measures are essentially an interference with the property rights of citizens. Article 11 of the "Electronic Data Provisions" stipulates that the head of the public security organs at or above the county level or the chief procurator is the review subject. The head of the public security organs at or above the county level approves the measures to freeze electronic data within the agency, and the head of the procuratorate approves the freezing of electronic data by the self-investigation department. In essence, they are all internal approval and supervision of the investigation subject, and the judicial supervision role of the procuratorate has not been played; second, the specific ways to freeze electronic data and the authenticity procedures for frozen electronic data are not clear. For example, freezing virtual currency requires assistance from virtual currency trading platforms other than investigators, but the regulations on the assistance obligations and assistance procedures of the assistors are not clear. In practice, there are even cases where the virtual currency trading platform itself is suspected of committing a crime; third, the existing methods of freezing electronic data are only regulated in the form of enumeration. There are no specific regulations on how to freeze each method in laws and regulations, and the "Electronic Data Provisions" set a bottom-line clause for the freezing methods of electronic data. The emergence of this clause may lead to the investigative agency taking freezing measures in judicial practice to break through the restrictions of the Criminal Procedure Law. The above issues prove that the means of freezing electronic data, represented by freezing virtual currency accounts, are still imperfect, and there is an urgent need to strengthen legislation to achieve effective connection with the criminal procedure system.
(II) The consequences and remedies of illegal freezing are not clearly defined
Since the purpose of freezing electronic data is to preserve evidence, relevant provisions on evidence collection, extraction, and exclusion of illegal evidence should be applied, and timely relief should be provided for virtual currency accounts frozen in violation of legal procedures. Article 94 of the "Interpretation of the Supreme People's Court on the Application of the Criminal Procedure Law of the People's Republic of China" stipulates that if the authenticity cannot be determined after review, or the time, place, and method of production and acquisition are in doubt and no reasonable explanation or necessary proof can be provided, the obtained electronic data shall not be used as the basis for the final decision. The provisions of the illegal evidence exclusion rules for electronic data are too general, and there is no clear distinction between different methods of electronic data collection. Freezing electronic data as a way for investigative agencies to collect electronic data should stipulate the consequences of illegal freezing of electronic data. Since the current provisions on freezing electronic data also have general provisions, the definition of illegal freezing of electronic data is not clear, which also hinders the legislative construction of illegal freezing of electronic data. In a case represented by the author, the victim retrieved and submitted the defendant's virtual currency transaction data on his own. The author promptly applied for the exclusion of illegal evidence. If the legal consequences and relief measures of illegal freezing can be clearer, such illegal behavior will be greatly reduced in judicial practice.
III. Suggestions for improving the freezing procedure of virtual currency accounts Based on the above-mentioned issues and analysis, the author proposes suggestions for improving the freezing of electronic data represented by virtual currency accounts in combination with case handling experience. First, in terms of legal basis, the revision of the Criminal Procedure Law can consider expanding the concept and objects of freezing and clarifying the legality of freezing electronic data. Secondly, in terms of procedural provisions, a series of procedural issues involving freezing of electronic data should be clarified, such as the review subject, collection method, and assistant system. In addition, based on the reality that virtual currency exchanges in my country have moved their platforms and servers overseas, strengthening the judicial assistance system for freezing overseas electronic accounts is also a key point to be considered in the subsequent improvement of freezing procedures. Finally, in terms of judicial relief, judicial correction and relief provisions should be set for illegal freezing matters, and evidence that cannot be corrected should be excluded as illegal evidence in a timely manner. The imperfect freezing of electronic data should not be allowed to become a lawless place that violates the justice of criminal procedure. It is worth mentioning that the above arguments are all based on the fact that virtual currency is identified as electronic data. The author believes that the best way to strengthen the connection between the Criminal Procedure Law and the Criminal Law and freeze virtual currency accounts to preserve the interests of the parties is to recognize the property attributes of virtual currency. In this way, virtual currency can be the object of property freezing in the Criminal Procedure Law, directly apply traditional freezing regulations, and can also be dealt with as a crime of property infringement in the Criminal Law. IV. Conclusion In summary, freezing the virtual currency accounts involved in cryptocurrency crimes has become a common practice in the practical field. However, since judicial practice has not yet unified the identification of the property attributes of virtual currency, the freezing of virtual currency accounts should apply new electronic data freezing measures. However, the introduction of this measure was late, and there are shortcomings such as unclear judicial positioning, imperfect procedural regulations, and lack of illegal consequences and relief measures, which should be corrected. However, the cases selected for the newly established People's Court Case Database in 2023 all tend to affirm the property attributes of virtual currency, which is quite different from previous court judgments and may foreshadow a shift in the recognition of the property attributes of virtual currency in the future. If the country subsequently clearly affirms the property attributes of virtual currency, the procedural problems encountered in freezing virtual currency as electronic data mentioned above will be easily resolved.
