Stealing virtual currency—is it a crime of property infringement or a crime of illegal data acquisition?

Writing by: Liu Zhengyao

Introduction

Imagine this scenario: one day, programmer Xiao Liu logs into his wallet and discovers that the Bitcoin in it has disappeared out of thin air—coins worth nearly one million yuan have been quietly transferred away by someone who hacked the private key. He immediately reports to the police, and the police quickly identify the criminal suspect.

But what happens next leaves Xiao Lin utterly baffled: when the prosecutor’s office discusses what crime to charge the suspect with, there are serious internal disagreements. Some say theft, while others say it can only be charged as “the crime of illegally obtaining data from a computer information system.” With these two charges, the sentencing outcome could be vastly different.

This is not an isolated case. In recent years, as virtual currencies have become increasingly popular, similar legal disputes have been playing out repeatedly in courts across the country. Even for “coin stealing,” some people receive heavy sentences, while others end up with only minor charges. Behind this lies a fundamental problem that Chinese law has not fully resolved to this day: what exactly is a virtual currency?

How does coin theft happen?

Before discussing legal issues, let’s first briefly understand how virtual currencies are “stolen.”

Virtual currencies like Bitcoin and Ethereum are essentially stored in blockchain networks. The reason you “own” them is that you control a string of passwords called a “private key.” Whoever has this private key can use the corresponding coins.

So stealing virtual currency is completely different from breaking into a home to steal cash or other valuables. Hackers either invade your computer or wallet software through technical means to obtain the private key; or they forge websites and send phishing emails to trick you into handing over the private key yourself.

Once the coins are transferred, the records on the blockchain cannot be undone. This feature is one of the reasons that later sparked legal disputes.

Two “legal perspectives”

Under China’s current legal framework, handling such cases mainly involves two crimes, which correspond to two completely different logics.

First logic: Virtual currency is property; stealing it is theft.

This logic sounds very straightforward. Bitcoin can buy things and exchange for money, with a price of tens of thousands of yuan per coin; and creating Bitcoin also requires consuming large amounts of energy such as electricity—so why shouldn’t it be considered property? Courts holding this view usually convict under theft or fraud. Once the amount involved is huge, the sentence can be correspondingly severe; for cases with particularly serious circumstances, the defendant may be sentenced to more than 10 years or even life imprisonment.

Second logic: Virtual currency is merely data; stealing it is “the crime of illegally obtaining data from a computer information system.”

This logic comes from the technical layer. The way Bitcoin exists on the blockchain is, in essence, a string of digital records. The act of hackers invading a wallet and obtaining the private key fits the characteristics of “illegal intrusion into a computer information system.” Under this logic of conviction, the maximum penalty is only 7 years, far lighter than theft.

The same act, two sets of logic, two outcomes—this is exactly what makes the parties involved and their lawyers headache. Although more and more Chinese courts are currently starting to recognize the property attributes of mainstream virtual currencies like Bitcoin and Ethereum, it is still difficult to achieve uniformity nationwide. Some courts still believe virtual currencies are merely data, not property. Also, how to distinguish so-called mainstream coins from non-mainstream ones—at present, there is no standard in the field of law that can be widely accepted by the public. In addition, regulatory rules in mainland China that prohibit virtual currency trading and the provision of pricing services mean the disappearance of the second logic is not so easy.

Why do court judgments differ?

The answer goes back to an underlying contradiction: China’s legal classification of virtual currencies is itself contradictory.

On the one hand, regulators such as the People’s Bank of China have clearly stated that virtual currencies such as Bitcoin do not have the same legal status as fiat currency and cannot circulate as money in the market. After the 2021 “9.24 Notice,” in 2026, relevant authorities issued further a “Document No. 42” (“Notice on Further Preventing and Defusing Relevant Risks of Virtual Currencies”), comprehensively banning virtual-currency-related businesses. From this perspective, in the official view, virtual currencies are not something like “lawful property.”

Especially when handling civil disputes involving virtual currencies, contracts involving lending, buying, selling, investing, and so on related to virtual currencies are all invalid, and legal risks are borne by the parties themselves. Although some courts may recognize the value attribute of virtual currencies in civil adjudications, they are not taking an attitude of protecting holders and traders of virtual currencies.

On the other hand, when courts handle criminal cases involving virtual currencies, they have repeatedly acknowledged that virtual currencies have property attributes and can be subject to confiscation and forfeiture. As for what happens later—whether the funds are remitted to the state treasury or returned to victims—liquidation can be carried out through judicial disposal involving virtual currencies.

This creates a strange situation: in criminal law, virtual currencies are property, but in civil law they may not be considered legitimate property worthy of protection. In different judicial procedures, the same thing may lead to completely different conclusions depending on which court it is heard in.

How serious is this dispute?

From the publicly available cases in recent years, verdicts for similar cases vary quite dramatically across different regions.

Some local courts determine that although Bitcoin is not legal tender, it has actual value, and if it is stolen it should be handled as theft, resulting in heavy sentences. Other local courts believe that since the state does not recognize virtual currency as lawful property, then “public and private property” in the sense of criminal law naturally does not include it, so conviction can only be made for a data-type crime.

Even more confusingly, even for the same type of case, courts at different levels sometimes overturn lower-court rulings and change the direction of the conviction. This means that even if the loss is the same—100 million yuan in virtual currency—the ultimate ruling on your case depends to a large extent on which city you are in and which judge you encounter.

This uncertainty is a real risk for an increasing number of ordinary people participating in virtual currency trading.

What is the core difference between the two crimes?

Simply put, the difference lies in the objects that the law protects.

The theft crime protects property rights—when your property is taken, whether it is cash, gold, or a phone, the law aims to ensure you receive fair compensation and impose sufficiently severe punishment on the offender. The more valuable the property, the heavier the crime.

The crime of illegally obtaining data from a computer information system protects the security of information systems—if someone without authorization intrudes into your computer system and damages the integrity and confidentiality of the data, this crime is not so concerned with how much that string of data is “worth.” It focuses on the intrusion act itself.

When virtual currency is classified as “data,” even if its value is in the tens of millions, it may still be handled only as a data-related crime, with sentencing reduced significantly. In practice, this creates an obvious imbalance of crimes and penalties: if you steal things of the same value, but because the “nature” of the item is different, the intensity of punishment can differ greatly.

The existence of this dispute fundamentally comes from the fact that China’s current legal system was established before virtual currencies were widely adopted.

Crimes such as theft and fraud were designed by the legislation to target tangible, visible property, or legal tender in bank accounts—private keys and tokens on the blockchain fall completely outside what people back then could imagine.

Meanwhile, the government’s regulatory stance on virtual currencies has been tightening, which also makes judicial authorities cautious about recognizing their “property attributes”—after all, if courts clearly define Bitcoin as property protected by criminal law, to some extent that would be tantamount to implicitly recognizing its lawful status.

This policy-level dilemma ultimately carries over into individual judicial cases.

Conclusion

The question of “what crime should be charged for stealing a virtual currency” may appear to be highly technical, but it actually reflects an era’s confusion: when the pace of technological development far exceeds the pace of legal updates, the old rules develop cracks.

Virtual currency is neither money in the traditional sense nor ordinary data in the usual sense—it is a brand-new kind of existence. Ultimately, the law’s classification of it needs a clear answer at the legislative level, rather than forcing every victim to “bet” on what their judge will think.

Before that answer arrives, understanding that this dispute exists is itself a form of self-protection.