Manchun Research | Beijing "Involved Virtual Money Disposal" Seminar, what are the key contents?

On January 19, 2025, a seminar on the disposal of Virtual Money cases, jointly sponsored by the Law School of Renmin University of China and other institutions, was held in Beijing. During the conference, nearly 60 representatives from the Legislative Affairs Commission of the National People’s Congress Standing Committee, the Supreme People’s Court, the Supreme People’s Procuratorate, the Ministry of Public Security, as well as the academic and legal communities, and business representatives, conducted in-depth discussions on the disposal of Virtual Money in China from multiple perspectives including legal attributes, policy norms, and technological applications. This not only addresses the practical needs for the disposal of Virtual Money in actual cases, but also provides theoretical basis and practical reference for the optimization of future regulatory policies. In recent years, Virtual Money has become an important tool for cybercrime, involving various types of cases such as fraud, money laundering, and theft, due to its decentralization, anonymity, and cross-border mobility. This makes it a pressing issue to regulate the disposal of Virtual Money in accordance with current regulatory policies. The convening of this seminar not only represents an important exploration in the field of Virtual Money governance in China, but also reflects the governance approach of combining justice and technology, and integrating the rule of law with innovation. So, what changes can we see from the discussion at the seminar? What new developments will these changes bring to the subsequent judicial disposal? In this article, Lawyer Mankun discusses the future optimization direction of judicial disposal of Virtual Money, combining the practice of Virtual Money regulation and disposal in China in recent years, as well as the key content of this seminar.

Virtual Money司法处置现状 In recent years, with the frequent occurrence of Virtual Money in criminal activities, the judicial authorities in our country have accumulated a certain amount of practical experience in handling cases involving Virtual Money. In order to effectively deal with Virtual Money-related crimes, the judicial authorities in our country have adopted some innovative disposal methods in practice. For example, in asset tracing, through cooperation with blockchain analysis companies and the use of on-chain data analysis tools, precise positioning of fund flows is carried out; in asset preservation and freezing, exploration of the mode of converting Virtual Money into legal tender or managing it through custody platforms has been conducted. In addition, some local public security agencies have entrusted third-party technology platforms to realize or manage the assets involved, initially forming a relatively effective technical support and judicial linkage mechanism. Despite some exploration, the uniqueness of Virtual Money still poses multiple challenges to the existing judicial disposal mechanism: The legal attributes are ambiguous. The legal status of Virtual Money is not yet clear, leading to disputes in the judicial determination of cases. Whether Virtual Money is property, commodity, or security, different standards may apply in different cases, increasing the complexity of judicial work. It is difficult to trace cross-border assets. The cross-border liquidity of Virtual Money makes it difficult for law enforcement agencies to track and freeze assets flowing overseas. In addition, the mechanism for international judicial cooperation is imperfect, further limiting the efficiency of handling cross-border cases. Inadequate protection of victims’ rights. Under the current disposal mechanism, the realization and distribution of Virtual Money involved in the case are mostly led by public security agencies, and the rights and information rights of the victims are often not fully guaranteed, making it difficult for some victims to obtain fair compensation. Mismatch between technical means and judicial capabilities. The decentralization and anonymity of Virtual Money place higher demands on technical investigations. However, in some regions, judicial agencies are insufficient in technical means, making it difficult to fully adapt to the complex on-chain tracking requirements. And these challenges were comprehensively analyzed at the “Involved Virtual Money Disposal” seminar, where experts not only put forward targeted solutions but also outlined the potential optimization path for future judicial practice, pointing the way for the regularization and legalization of Virtual Money disposal.

Changes in the Disposal Policy of Virtual Money It is not difficult to see from this seminar that China is gradually transitioning from practical accumulation to policy optimization in the disposal of Virtual Money. The multiple suggestions put forward by the experts at the meeting not only clarify the shortcomings of the current policies and the future development direction, but also address the difficulties in judicial practice, providing guidance for the future systematic and standardized supervision. Clarify the legal attributes: from vague to clear The legal attributes of Virtual Money have long been in a gray area, but in the discussions of this seminar, experts suggest starting from the perspective of simplifying operations and treating Virtual Money as a general equivalent for disposal. This definition not only helps to avoid disputes over the classification of ‘currency’ or ‘securities’, but also provides judicial authorities with greater flexibility in terms of characterization and operation. At the same time, experts also call for legislation to clarify the property attributes of Virtual Money, reduce uncertainty in judicial practice, and provide a unified legal basis for subsequent regulation. Regulatory Coordination: Strengthening multi-departmental collaboration In the case of Virtual Money, the division between criminal justice and administrative supervision is the main bottleneck restricting disposal efficiency. The seminar proposed that by strengthening inter-departmental collaboration and establishing a cross-departmental data sharing mechanism, the efficiency of case investigation and asset disposal can be effectively improved. For example, in the asset tracing process, deep cooperation between law enforcement agencies and technology platforms can be achieved through the introduction of blockchain analysis technology. In the asset preservation process, the linkage between public security agencies, procuratorates, and courts should be strengthened to ensure the legality and efficiency of fund freezing and disposal. Victim Rights Protection: Enhancing Transparency and Participation Currently, the disposal process of the involved Virtual Money is mostly led by law enforcement agencies, but victims often find it difficult to participate and lack transparency. The seminar suggests that future policies should pay more attention to the victims’ sense of participation and right to know. Starting from the legitimacy and transparency of the disposal rules, optimize the property return mechanism and provide more legal protection for the victims. For example, public hearing procedures can be introduced to ensure fairness and justice in the disposal process, while giving victims the right to participate in the selection of property disposal methods to maximize their interests. Cross-border Cooperation: Solving the Challenge of International Collaboration The cross-border nature of Virtual Money poses significant challenges in terms of jurisdiction and asset tracking for many cases. Experts suggest that China should enhance cooperation with the international community, share Virtual Money transaction data through signing bilateral or multilateral agreements, and establish a joint law enforcement mechanism. At the same time, by promoting legal and technical coordination on a global scale, explore internationally accepted standards for the disposal of Virtual Money, providing more possibilities for cross-border asset recovery. Technology Empowerment: Enhancing Disposal Efficiency The complexity of the Virtual Money case requires further optimization of technical means. The seminar pointed out that judicial authorities should rely more on advanced blockchain analysis tools, such as on-chain transaction tracing, electronic evidence identification, etc., in dealing with Virtual Money. At the same time, they should strengthen cooperation with third-party technology companies and use professional services to achieve efficient disposal. Meanwhile, it is also necessary to establish technical standards to clearly regulate the legitimacy and transparency of third-party services and prevent potential legal risks.

Summary by Lawyer Mankiw The disposal of virtual money is an important part of the modernization of national governance, and it is also a typical scenario of in-depth integration of law and technology. The seminar on “Disposal of Virtual Money Involved in Cases” showed the evolution of China’s thinking in the field of virtual money governance, and also provided valuable inspiration for future policy and judicial practice. Based on the results of the seminar, Mr. Mankiw further put forward the following directions and suggestions: Accelerate the legislation of Virtual Money property In the seminar, it was proposed to treat Virtual Money as a general equivalent to simplify judicial operations. Lawyer Mankiw believes that based on this, clarifying the property of Virtual Money through legislation can not only reduce qualitative disputes, but also provide legal basis for asset freezing, auction, and return. This will effectively alleviate the problem of qualitative ambiguity in judicial practice and promote the standardized disposal of Virtual Money. Strengthen cross-departmental linkage mechanism The seminar suggests strengthening the coordination between criminal justice and administrative supervision, optimizing the process of case investigation and asset disposal. We believe that data sharing should be the core, exploring the establishment of a national Virtual Money case information sharing platform, centrally managing asset tracking and freezing information, realizing real-time collaboration between law enforcement agencies and technical platforms, and providing efficient support for complex cases. Increase victim participation Currently, the disposal of Virtual Money cases is mainly led by the public security organs, lacking a mechanism for victim participation. The symposium proposed a transparent return mechanism, and lawyer Mankun further suggested exploring a public platform based on blockchain technology to achieve transparent management of the entire process of asset return through smart contracts. This can not only enhance the trust of the victims, but also enhance the credibility of judicial disposal. Build a new mechanism for international cooperation The seminar discussed the difficulties of cross-border asset recovery, but there are still shortcomings in specific cooperation mechanisms. Lawyer Mankun suggested promoting the normalization of international judicial cooperation through regional cooperation (such as judicial cooperation within Asia) or joining the global blockchain regulatory alliance, especially in areas such as data sharing, asset freezing and return, to form clear multilateral agreements and technical standards. Enhance technical standardization and legal constraints Currently, the disposal of Virtual Money relies on third-party tools and services, but the use of technical tools still lacks clear legal norms. Lawyer Mankun suggests that application standards and compliance guidelines for judicial technical tools should be formulated to clearly regulate key processes such as blockchain analysis and electronic evidence identification, in order to prevent technical abuse and the emergence of legal loopholes. / END.

*This article is an original article of Shanghai Mankun Law Firm, representing the personal views of the author of this article, and does not constitute legal advice or legal opinions on specific matters. More Web3 practitioners are welcome to contribute and expose. For reprinting and legal consultation, please contact customer service: mankunlawyer. The author of this article Iris, Lawyer Liu Honglin