A straw platform! The People's Court Daily published an article entitled "Criminal Characterization of Illegal Theft of Virtual Currency". The document even mistakenly wrote USDT as ustd. Was it intentional or out of ignorance?

The case itself is not complicated, that is, Zhang San stole Li Si's virtual currency USDT and sold it for profit.

However, the analysis of the case by the court personnel in the article gives people a chilling feeling, revealing a sense of: "Although I don't understand blockchain and virtual currency, I think you should be sentenced severely!", which makes people feel a little uncomfortable.

1️⃣ Court’s opinion 1: USDT is obtained through mining, and the total amount is constant

Many judgments have made the low-level mistake of writing USDT as ustd. Whether stealing other people’s virtual currency should be classified as theft or illegal acquisition of computer system data has been a controversial issue in judicial practice and has not yet been determined.

Therefore, this article is also a familiar discussion, analyzing what crime should be attributed to the defendant in this case. The author believes it should be classified as theft, which is not unreasonable, but the basis for concluding that it constitutes theft gives a sense of 'a donkey's head does not match a horse's mouth.'

According to the above chart, the author believes that in this case, virtual currency possesses characteristics such as scarcity and utility:

Scarcity: The total amount of virtual currency is constant and not infinitely supplyable;

Utility: It is manifested as virtual currency being a specific data encoding that must be generated through 'mining,' which condenses social abstract labor;

However, in this case, the defendant stole USDT, not Bitcoin.

(1) Does Tether have scarcity? Is its total amount constant?

USDT (Tether) is a stablecoin issued by Tether Limited, aimed at solving the volatility problem of traditional cryptocurrencies. The supply of USDT is also adjusted by Tether based on market demand, meaning the company decides whether to increase the supply of USDT according to market demand. Additionally, Tether has promised that every unit of USDT is backed by one dollar in reserves, so theoretically, the increase in USDT should correspond with the increase in dollar reserves.

It is clear that as the demand for BTC rises, the supply of USDT will inevitably increase. Therefore, the total amount of Tether is not constant; it is dynamically changing.

(2) Must USDT be generated through 'mining'?

Whether virtual currency relies on mining depends on factors such as consensus mechanisms, currency types, and whether miners need to maintain network security. Under the Proof of Work (PoW) mining mechanism, miners compete to solve complex mathematical problems (hash problems) to validate transactions and generate new blocks, requiring a large amount of computational resources and hardware. Successful miners can gain the right to generate new blocks and receive cryptocurrency rewards, as with Bitcoin, which relies on mining.

But USDT is different. It is not a cryptocurrency generated by mining mechanisms; it is a stablecoin, with issuance and destruction controlled by Tether, having nothing to do with mining.

2️⃣ Court Viewpoint Two: The defendant should be subjected to a single severe penalty.

After demonstrating that the defendant's actions constitute both theft and the illegal obtaining of computer system data, the author believes that according to the principle of choosing one severe crime based on imagined competition, this case should be classified as theft.

The law is rigorous; a correct conclusion should not be drawn from an incorrect reasoning process.

Moreover, concluding that such cases constitute theft may not necessarily be absolutely correct. After all, in a considerable number of cases, judges have dismissed the value of virtual currencies or avoided discussing whether virtual currencies have value, directly categorizing the defendant's act of stealing virtual currency as the illegal acquisition of computer information system data.

Yu Haisong, director of the criminal division of the Supreme People's Court research office, has also stated, 'In the absence of clear prior legal basis, having property attributes does not necessarily mean it becomes property under criminal law, and relevant behaviors may not necessarily pertain to property crimes.'

The maximum penalty for theft is life imprisonment, while the maximum penalty for illegally obtaining computer information system data is 7 years.

The conclusion that the defendant should be severely punished due to the judges' misunderstanding of the nature of the virtual currency involved is indeed hard to accept.

If the judges also 'misunderstand' this, it would be truly terrifying. Criminal law, as the most severe legal measure, is directly related to citizens' freedom, property, and even life. Moreover, even if one does not trade cryptocurrencies or understand blockchain, these conceptual distinctions can easily be understood through a quick search; they are not particularly profound.

Some viewpoints in this article come from—Lawyer Shao.