As the capital market continues to prosper, the virtual currency market is also showing a rebound trend. As Bitcoin continues to rise, topics related to virtual currencies have increased significantly during the National Two Sessions. Related issues such as the supervision and legislation of virtual assets have become the focus of delegates' attention.
Financial reform cannot be separated from legal protection. During the two sessions, many National People's Congress deputies suggested revising the "Law of the People's Bank of China" as soon as possible to implement the central bank's financial reform arrangements and adapt to the needs of building a modern central bank system.
While amending the law to meet the needs of the People's Bank of China to perform its duties in the new era, representatives also suggested making legislation more forward-looking, improving RMB management regulations, and focusing on digital currency issuance and virtual currency risks.
Lin Jianhua believes that we should actively respond to the public's demand for legal digital currencies under the conditions of the digital economy, improve the legislative foresight in the revision of the "People's Bank of China Law", improve the top-level design of digital renminbi, and leave legal space for the issuance of digital currencies. Jin Penghui suggested that my country should guard against virtual currency risks and make it clear that any unit or individual is prohibited from producing and selling digital tokens.
However, some representatives expressed more open views. "The disposal of virtual currencies has become a key and difficult issue in judicial practice." Jiang Fan, a representative of the National People's Congress and chairman of the board of directors of Hunan Renren Law Firm, suggested in an interview with a reporter from the "Rule of Law Daily" that the "Criminal Procedure of the People's Republic of China" should be revised. The relevant provisions of the Law will further improve the disposal system of virtual currencies involved in the case.
In recent years, due to the popularity of criminal activities such as fraud, extortion, money laundering, and terrorism, criminal cases involving virtual currencies have shown an increasing trend year by year, and the proportion of virtual currencies in criminal property involved has continued to increase.
Last year, there was a highly publicized "cross-border online gambling case" in Jingmen City, Hubei Province, in which the persons involved used virtual currency for settlement. The task force contacted the virtual currency issuer and froze the relevant virtual currency accounts involved in the case, preventing the virtual currency involved in the account worth US$160 million (approximately RMB 1 billion) from flowing into the hands of the suspect gang. In October 2022, the People's Court of Shayang County issued a judgment to confiscate part of the frozen virtual currency in accordance with the law. This case became the first "virtual currency case" in the country to be confiscated by a court. People can’t help but wonder, how is the “confiscation of virtual currencies” implemented? How did the enforcement agency monetize these virtual currencies?
Since virtual currency has different properties from traditional property, the existing institutional regulations, investigation measures and property disposal methods cannot meet the actual needs of the seizure, custody, realization and other activities of virtual currency involved in the case. Jiang Fan pointed out that relevant normative documents are unclear on key issues such as the criteria and procedures for the handling of virtual currencies by case-handling agencies. Some case-handling agencies have no choice but to adopt subjective presumptions to advance the process of handling property involved, resulting in criminal cases in judicial practice. Currency disposal has encountered practical problems such as lack of legal application, imperfect enforcement measures, and questionable liquidation procedures.
In addition, the contradiction between the ban on the circulation of virtual currencies in the country and the practical need to dispose and realize the virtual currencies involved cannot be reconciled. Since the "Notice on Further Preventing and Dealing with Speculation Risks in Virtual Currency Transactions" clearly stipulates that virtual currencies cannot be circulated in the market as currency, virtual currency-related business activities are classified as illegal financial activities, and virtual currency investment and trading activities are not protected by civil laws.
Therefore, in practice, in order to safeguard national interests and the interests of victims and solve judicial case-handling problems, most judicial agencies entrust private technology companies to dispose of virtual currencies on their behalf, and the disposal companies sell the virtual currencies on their behalf, and after deducting service fees, the proceeds are handed over to the judiciary. organ. However, there are problems in the actual operation process such as insufficient legal basis, excessive realization costs, and difficulty in supervising the disposal process. At the same time, the disposal process lacks openness and transparency, which is likely to lead to problems such as rent-seeking, profit differentials, and corruption.
In fact, the realization of virtual currencies seized in criminal cases can actually meet the interests of multiple parties. The huge economic value behind it can make up for the property losses of victims of criminal cases, protect the legitimate rights and interests of victims from infringement, and provide criminal justice. The suspect returns the stolen goods and compensates, thus gaining the opportunity for leniency in sentencing.
Therefore, Jiang Fan pointed out that regarding the supervision and handling of virtual currencies, relevant laws and regulations need to be revised in a timely manner to clarify the disposal guidelines and procedures for virtual currencies involved, improve the forward-lookingness of legislation, and at the same time strengthen supervision and openness and transparency to prevent the risks of virtual currencies. and ensure the fairness and efficiency of judicial case handling.
Summarize
In short, virtual assets have become a part of the financial market that cannot be ignored. With the listing of the US Bitcoin spot ETF, the connection between crypto assets and traditional finance will only become stronger. If you continue to adopt an indifferent approach, you may lose this emerging market. Imperfect laws and regulations may also lead to the increasing accumulation of market risks and the inability to protect the rights and interests of investors. Therefore, only by formulating comprehensive and effective regulatory policies and regulations, strengthening international cooperation, and protecting the rights and interests of investors can the healthy and stable development of the virtual asset market be achieved.
