JusticiaNet: Establishing a Multi-Jurisdictional Legal Process for Criminal Cases Involving Virtual Currency, Exploring Three Disposal Measures: "Liquidation, Destruction, Return"

BlockBeats News, December 14th. The Justice Net, under the Procuratorial Daily of the Supreme People's Procuratorate of China, published an article titled "Establishing a Multi-Faceted Judicial Disposal Path for Criminal Virtual Currency Cases," mentioning the exploration of three disposal measures: "realization, destruction, return." The author of this article is a member of the Party Committee of the Third Division of the Beijing People's Procuratorate, a first-level researcher, a professor at the Law School of the Capital University of Economics and Business, a doctoral supervisor, and a research assistant at the Integrity and Rule of Law Research Center of the Capital University of Economics and Business. The article points out:

First, clarify the legal status and role positioning of third-party institutions. Under the current legal framework, third-party institutions lack clear legal authorization to participate in the disposal of criminal assets. In the future, legislation could include a special program authorization framework for the disposal of criminal assets, incorporating third-party institutions into the category of judicial auction assistants and granting them exclusive qualifications for "one-time, targeted, non-public bidding."

Second, establish a dual system of technical standards and procedural norms. To ensure the compliance and transparency of the disposal process, the Supreme Court and the Supreme Procuratorate, together with financial regulatory authorities, should jointly issue dual standards for technology and procedures.

Third, strengthen the full-process connection of procuratorial supervision and rights protection. Procuratorial organs can participate in the entire disposal process and conduct dynamic supervision. Specifically, procuratorial organs may require third-party institutions to regularly submit progress reports on disposal, including on-chain tracking records, bidding processes, fund transfer vouchers, etc. At the same time, an information disclosure and objection mechanism can be established to ensure that the persons involved in the case and bona fide third parties can promptly understand the disposal situation and raise objections.

Fourth, explore a differentiated disposal model to meet diverse needs. Using the proportionality principle as a benchmark, differentiate the application of the three disposal measures: realization, destruction, return. For cases involving the return of victims' property, a targeted auction realization model may be prioritized to ensure full reimbursement of the realization proceeds. For example, in cases where victims of fraud have stablecoins that have not been exchanged and are willing to return the original coins, they can be directly returned under specified conditions to avoid exchange rate losses. For cases involving the confiscation of contraband, a destruction or technical retention model can be adopted to prevent re-entry into the market. For tokens specifically used for MLM or gambling, if they have poor liquidity and insufficient market depth, forced realization may devalue the tokens. In such cases, lawful destruction with a record in the judgment document may be carried out. For high-value coins where criminal proceeds have been commingled with legal investments, realization should be prioritized to maximize loss recovery.