BlockBeats News, December 14th. The Justice Website 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 Cases Related to Virtual Currency,” mentioning the exploration of three disposal measures: “realization, destruction, and return.” The author of this article is a member of the Party Committee of the Third Branch of the People’s Procuratorate of Beijing, a first-level researcher, a professor and doctoral supervisor at the Law School of the Capital University of Economics and Business, and a research assistant at the Center for Clean Governance and Rule of Law 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, the participation of third-party institutions in the disposal of criminal assets lacks clear legal authorization. In the future, legislation can include the authorization framework of a special procedure for the disposal of criminal assets, incorporate third-party institutions into the category of judicial auction assistants, and grant them exclusive qualifications for “one-time, targeted, non-public competitive 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 technical and procedural standards.
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 can require third-party institutions to regularly submit disposal progress reports, including on-chain tracking records, bidding processes, fund transfer vouchers, etc. At the same time, they can establish a rights notification and objection mechanism to ensure that the individuals involved in the case and bona fide third parties can promptly understand the disposal situation and raise objections.
Fourth, explore differentiated disposal models to meet diverse needs. In the future, different disposal models can be explored, with the proportionality principle as a benchmark, applying different disposal measures such as realization, destruction, and return. For cases involving the return of property to victims, a targeted bidding realization model can be prioritized to ensure full repayment of the realization proceeds. For stablecoins that victims have not yet exchanged due to fraud and are willing to receive the original coins back, they can be directly returned under specified conditions to avoid exchange rate losses. For cases involving the confiscation of prohibited items, destruction or technical sealing may be used to prevent re-entry into the market. For tokens dedicated to pyramid schemes or gambling with poor liquidity and insufficient market depth, forced realization may lead to depreciation; therefore, they can be legally destroyed, with the destruction record detailed in the judgment document. For high-value coins where criminal proceeds have been commingled with legal investments, realization can be prioritized to maximize loss recovery.
