A landmark criminal case published by China’s Supreme People’s Procuratorate has established Bitcoin as legally protected property under Chinese criminal law, creating a striking legal paradox in a country that maintains one of the world’s strictest cryptocurrency prohibitions.
The case, documented on June 7 by China’s highest prosecutorial authority, involved the conviction of an individual identified as Zhang who stole 107 Bitcoin by obtaining the victim’s wallet recovery phrase. Prosecutors in Qingdao successfully argued that the theft constituted a property crime, resulting in a sentence of ten years and nine months in prison plus a 100,000 yuan fine.
Legal Framework Recognition
The prosecution’s successful argument hinged on Bitcoin meeting the statutory definition of property under Chinese criminal law. Courts determined that Bitcoin satisfies two critical criteria: demonstrable economic value and the capacity for exclusive ownership control. These characteristics align with established legal standards for property protection within China’s judicial framework.
The stolen Bitcoin’s value was calculated at 660,000 yuan, approximately $91,000 based on the proceeds Zhang received from liquidating the cryptocurrency after the theft. This market-based valuation approach represents a practical recognition of Bitcoin’s economic reality within China’s legal system.
Regulatory Contradictions Emerge
The ruling creates a fascinating contradiction within China’s regulatory approach to digital assets. In September 2021, ten Chinese regulatory bodies including the People’s Bank of China declared all cryptocurrency transactions illegal, effectively banning trading, exchanges, and mining operations across the country.
This prohibition was expanded in May 2024 to explicitly cover stablecoins, real-world asset tokenization, and offshore yuan-pegged digital currencies. The government established a two-year rectification deadline for unauthorized cross-border financial channels involving digital assets.
Yet Chinese courts have consistently recognized Bitcoin’s property status in criminal proceedings. A Shanghai court ruled in 2024 that crypto ownership remains legal under Chinese law, with the South China Morning Post reporting on similar judicial recognition patterns.
Prosecutorial Guidance Signal
The Supreme People’s Procuratorate’s decision to publish this case carries particular weight within China’s legal system. Cases featured on the SPP’s official platform serve as guidance for lower-level prosecutors and courts handling similar matters across China’s 34 provincial-level jurisdictions.
This publication effectively instructs prosecutors nationwide to treat Bitcoin theft as property crime and value stolen cryptocurrency at market rates. The guidance operates independently of the trading and transaction ban that theoretically makes Bitcoin illegal to hold or transfer within Chinese borders.
The Shanghai Second Intermediate People’s Court previously described Bitcoin as a “unique and non-replicable” asset with clear financial attributes, reinforcing the judicial trend toward property recognition despite regulatory restrictions.
Global Legal Precedent
This development represents unprecedented legal territory for cryptocurrency regulation. No major jurisdiction has previously maintained simultaneous prohibition of digital asset use while providing full criminal law protection for ownership rights at the highest prosecutorial level.
The legal architecture creates a novel framework where citizens cannot legally buy, sell, or trade Bitcoin, yet courts will apply the full weight of criminal law to protect victims when Bitcoin is stolen. This dual approach reflects the practical challenges regulators face in addressing the economic reality of digital assets.
For institutional observers, the case signals that even the world’s most restrictive cryptocurrency regime cannot entirely escape legal recognition of Bitcoin’s fundamental characteristics as a store of value and transferable asset.
Market Implications
The ruling comes as global cryptocurrency markets face broader volatility, with Bitcoin recently experiencing significant price movements. The recognition of Bitcoin as protected property by China’s highest prosecutorial authority adds another layer to the complex regulatory landscape facing institutional crypto investors.
While China’s trading ban remains firmly in place, the judicial recognition of property rights suggests a more nuanced legal environment than blanket prohibition might initially indicate. This creates potential implications for how other restrictive jurisdictions might approach cryptocurrency regulation and enforcement.
The case establishes that legal systems may struggle to deny the fundamental economic characteristics that make Bitcoin function as a digital asset, even when broader policy objectives favor prohibition. For institutional investors monitoring regulatory trends, this development illustrates the persistent legal challenges regulators face when attempting to categorically ban decentralized digital assets while maintaining coherent property law frameworks.
