Law enforcement and academia representatives in Shanghai held a seminar on cryptocurrencies, regulations, and fighting crypto-crime. The determination of “the legal properties of virtual currencies” was one of the main topics of the forum, which also had questions of financial supervision in view.
Prosecutors and professors discuss crypto oversight in Shanghai
Amid an ongoing crackdown on cryptocurrency mining, trading and other related activities in China recently, law enforcement, judicial and academic officials gathered in Shanghai to discuss “virtual currency”. The debate focused on issues of current legislation and supervision as well as the challenges of a legal definition of cryptocurrencies and the treatment of offenses related to digital assets.
The event was organized by various departments of the Shanghai Procuratorate, People’s Court, the Legal Team of the Shanghai Public Security Bureau, and the Research Center for Financial Supervision and Criminal Governance of the East China Political Science and Law University. The Shanghai Public Prosecutor’s Office’s Banking and Insurance Center for Financial Crime also attended the talks, which also looked at the financial risks associated with decentralized money.
More than 50 experts and scholars from the city’s public safety authorities, judicial authorities and academia attended the forum, the Shanghai Prosecutor’s Office said on Monday.
The seminar was moderated by Wang Jianping, section head of the Shanghai People’s Procuratorate. In opening remarks, Attorney General Chen Siqun noted that financial security is an important part of national security and that preventing systemic financial risk is a priority for the authorities in Shanghai, a global financial center. Chen Siqun also said:
We have the responsibility and obligation to react actively to the risks of various financial innovations, to take a leading look at regulatory issues … to unify standards for financial fairness and to make proposals for financial supervision.
The forum paid special attention to two important topics – the legal characteristics and oversight of cryptocurrencies, and the rules on criminal offenses related to digital assets. Participants noted the increasing activity in the field of blockchain-based virtual currencies in recent years. In Chinese judicial practice, this has resulted in a number of cases of theft, robbery and extortion of crypto, as well as illegal fundraising and money laundering offenses.
“Virtual currency crimes currently mainly include: crimes using ‘virtual currency’ as a direct infringement object, asset, settlement method and money laundering method, as well as those related to transaction activities in ‘virtual currency’ and initial coin offering activities,” noted the Shanghai Prosecutor’s Office in their report on the event. A major problem is that different judicial authorities in China have different understandings of the legal characteristics of the many types of virtual currency. Some call it data, others consider it property. As a result, similar crimes involving cryptocurrencies are often punished very differently.
Cryptocurrency has property attributes in China
Yu Haisong, director of the Criminal Division of the Supreme People’s Court Research Bureau, pointed out that virtual currencies undoubtedly have property features, but whether it is property only remains unclear. He cited Article 127 of the Chinese Civil Code, which says, “If the law contains provisions to protect data and virtual network property, follow those provisions.” He acknowledged that there does not appear to be any other applicable law at this time, but stressed that the presence of property attributes does not necessarily mean that cryptocurrency is property in terms of criminal law.
According to Mao Lingling, director of the Financial Regulation and Criminal Governance Research Center and professor at East China University of Political Science and Law, the legal status of cryptocurrency remains unclear and the treatment of crypto-related crimes as property crimes is causing controversy.
Virtual currency is a new type of property that includes computer data and can be used for money laundering or illegal fundraising and the issuance of securities. In their opinion, if a digital coin has economic properties, then a crime involving cryptocurrency should be treated as a property crime, and if it does not, it should be treated as a cybercrime.
Professor Lingling stressed that the Chinese government has long insisted on strengthening financial supervision and pursuing a “zero tolerance” policy towards actions that endanger national financial security. The development of virtual currencies, especially privately issued coins in unlimited quantities, carries risks that threaten China’s financial security, she warned, adding that the relevant departments should take adequate care and further strengthen supervision.
What is your opinion on the views on cryptocurrencies that were expressed during the Shanghai seminar? Let us know in the comments section below.
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