The case itself is not complicated; it is simply that Zhang San stole Li Si's virtual currency USDT and sold it for profit.
However, the analysis of this case by the court personnel in the article evokes a chilling feeling, revealing a sense of: 'Although I do not understand blockchain or virtual currency, I think you should be severely punished!' which is somewhat uncomfortable.
1️⃣ Court viewpoint 1: USDT is obtained through mining, and the total amount is constant.
Many judgments have made the low-level error of writing USDT as ustd. Whether stealing someone else's virtual currency should be classified as theft or illegal acquisition of computer system data has been a continuous debate in judicial practice, and there is still no conclusion.
Therefore, this article is also a common 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 feeling of 'a donkey's head not matching a horse's mouth.'
According to the above figure, the author believes that in this case, virtual currency has 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,' and 'mining' condenses social abstract labor;
However, in this case, the defendant stole USDT, not Bitcoin.
(1) Does USDT have scarcity? Is the total amount constant?
USDT (Tether) is a stablecoin issued by Tether Limited, aimed at solving the volatility issues of traditional cryptocurrencies. The supply of USDT is also adjusted by Tether according to market demand, which means the company decides whether to increase the supply of USDT based on market demand. Additionally, Tether has promised that every unit of USDT is backed by 1 USD in reserves, so theoretically, the issuance of USDT should correspond to the increase in its USD reserves.
Clearly, as the demand for BTC rises, the supply of USDT will inevitably increase as well. Therefore, the total amount of Tether is not constant but 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 are needed to maintain network security. In the Proof of Work (PoW) mining mechanism, miners compete to solve complex mathematical problems (hash problems) to verify transactions and generate new blocks, which requires a large amount of computing resources and hardware. Upon success, they can obtain the rights to generate new blocks and receive cryptocurrency rewards, as Bitcoin relies on mining.
However, USDT is different. It is not a cryptocurrency generated through mining mechanisms; it is a stablecoin, with issuance and destruction controlled by Tether, and has nothing to do with mining.
2️⃣ Court viewpoint 2: The defendant should be punished for one serious crime.
After arguing that the defendant's actions constitute both theft and illegal acquisition of computer system data, the author believes that one serious crime should be punished based on the principle of imagined competition, so this case should be classified as theft.
The law is rigorous; a correct conclusion should not be derived from an erroneous reasoning process.
Moreover, concluding that such cases constitute theft may not be absolutely correct, as in a considerable number of cases, judges do not recognize the value of virtual currency or simply avoid discussing whether virtual currency has value, directly classifying the defendant's act of stealing virtual currency as illegal acquisition of data from a computer information system.
Yu Haisong, the director of the Criminal Division of the Supreme People's Court Research Office, has also stated, 'In the absence of clear legal basis, having property attributes does not necessarily mean it becomes property under criminal law; relevant behaviors do not necessarily have to apply to property crimes.'
The maximum penalty for theft is life imprisonment, and the maximum penalty for illegally obtaining data from a computer information system is 7 years.
Due to the erroneous understanding of the nature of the virtual currency involved by the judges, they reached the conclusion that the defendant should be severely punished, which is indeed difficult to accept.
If the judges also 'mistakenly believe' this, it is indeed terrifying. Criminal law, as the most severe legal means, directly relates to the freedom, property, and even life of citizens. Moreover, even if one does not trade cryptocurrencies or understand blockchain, these conceptual distinctions can be easily understood with a quick search, and are not particularly profound.
Some viewpoints in this article come from — Lawyer Shao.