What’s new in digital currency law?

In the past week, the judiciary has issued two judicial interpretations that have something to do with blockchain and digital currency.

What's new in digital currency law?

This past week, the judiciary issued two judicial interpretations related to blockchain and digital currency, namely the “Rules of the People’s Court on Online Litigation” issued on June 16 and the “Opinions on Several Issues Concerning the Application of Law in Handling Criminal Cases of Telecommunication Network Fraud (II)” issued by three authorities on June 22. These two documents may seem “ordinary”, and blockchain and digital currency are not the main protagonists of their contents, but they may have a profound impact on the judicial practice of crimes involving currency. In a nutshell, after the introduction of the two judicial interpretations, the criminal handling authorities have a clearer “substantive law + procedural law” basis for combating crimes involving blockchain and digital currency than in the past, so that they can launch a more efficient and accurate fight against crimes involving currency. The following is an attempt to analyze and sort out the recent legal documents related to digital currency by combining these two documents.

I. The Past of Digital Currency Legal Documents

Although we have been seeing the words “blockchain” and “digital currency” in official policy documents, the legal documents with higher levels of effectiveness, especially laws, administrative regulations and judicial interpretations (laws and administrative regulations are criminal laws), are not the only legal documents that can be used for the purpose of combating digital currency. However, in the higher-level legal documents, especially laws, administrative regulations and judicial interpretations (laws and administrative regulations are national regulations in the sense of criminal law, while judicial interpretations are interpretations of laws, which are very important bases for judgments in judicial practice), we seldom see officials “naming and shaming” blockchain and digital currency (or virtual currency) to be regulated. The “virtual currency” of 2010 was one of the earliest legal documents in which the word “virtual currency” appeared, but the virtual currency of that time was obviously different from this time, and the “virtual currency” of that year was only considered to be a game currency to assist in online gambling.

Therefore, for a long time, the authorities can only apply the relevant legal documents and legal views of traditional crimes to explain and judge crimes involving blockchain and digital currency. Although the cryptocurrency community is familiar with the “Notice on Preventing Bitcoin Risks” and “Announcement on Preventing Risks of Token Issuance and Financing”, these two documents are ultimately only departmental regulations, and have been criticized for their insufficient level of effectiveness and inability to adequately guide judicial practice. It can be said that the reason why the civil and criminal judgments related to digital currencies have different determinations in judicial practice is directly related to the lack of regulation of digital currencies (virtual currencies) in China’s laws, administrative regulations and judicial interpretations.

Second, the digital currency legal documents now

Since the end of 2020, authoritative legal documents have started to stop being secretive about “blockchain” and “digital currency”. Blockchain and digital currency (virtual currency) have started to appear on legal documents (laws, administrative regulations and judicial interpretations) with higher levels of effectiveness with increasing frequency. This trend of appearance can be divided into two levels: at the level of substantive law, some acts related to digital currencies are gradually suspected of administrative violations or criminal offenses; at the level of procedural law, the courts recognize the evidentiary capacity of evidence in the form of blockchain (as a kind of electronic data), and even presume that it is “untampered with after being uploaded to the chain” in terms of its probative power. “. Specifically.

(i) Substantive law level

At the end of 2020, the People’s Bank of China Law (the draft revision of the law for comments) took the lead in Article 22, which stipulates that no unit or individual shall make or offer token tickets and digital tokens to replace RMB in circulation in the market. As Sara’s team has analyzed in the past, if this provision is retained in the final draft and eventually takes effect, mining as an act of making digital tokens (although technically the mined coins are rewarded, but ultimately the “production costs” such as electricity are paid) will be clearly considered an administrative offense and the relevant platform may be deemed to be operating illegally.

On January 26, 2021, the Regulations on Prevention and Disposal of Illegal Fund Raising (administrative regulations) were announced, and in Article 19, it is clear that absorbing funds in the name of virtual currencies can constitute illegal fund raising. Although it has been nearly three and a half years since the introduction of the “Announcement on Preventing Risks of Token Issuance and Financing” (departmental regulation) in 17.

On June 17, 2021, the Supreme Court, the Supreme Prosecutor, and the Ministry of Public Security jointly issued the Opinions on Several Issues Concerning the Application of Law in Handling Criminal Cases of Telecommunication Network Fraud (II) (Judicial Interpretation), of which Article 10 clarifies that virtual currency dealers who continue to trade with their trading partners despite being explicitly informed that they are suspected of telecommunication network fraud crimes during the investigation of cases by the public security authorities can help information network The criminal responsibility can be investigated for the crime of information network criminal activities. Article 11 clarifies that knowing that the proceeds of telecommunication network fraud crimes and the proceeds generated from them are transferred, cashed out or withdrawn through virtual currency conversion of property at prices significantly different from the market, criminal liability can be pursued for the crime of concealing and concealing the proceeds of crime and proceeds of crime. However, there is evidence that really do not know except.

It should be said that this judicial interpretation is not particularly severe against digital currency related crimes. First, this judicial interpretation is to combat telecommunication network fraud crime as the main line, and digital currency related behaviors are only combated as helping behaviors, that is, for helping telecommunication network fraud behaviors, it is clear that it can constitute the crime of helping information network criminal activities; for helping crime proceeds behaviors, it is clear that it can constitute the crime of concealing and concealing crime proceeds. Secondly, there are some thresholds for the disposal of related crimes, such as the pre-crime act of helping to convince the public security authorities to explicitly inform the crime; the crime of concealing and concealing the proceeds of crime is punished by setting the condition of converting the cash digital currency “obviously different from the market price”. Thirdly, the overall number of digital currency-related acts that are explicitly cracked down on is relatively small, and they are digital currency helper crimes and money laundering crimes that have been cracked down on before, and Sara’s team has analyzed the related crimes many times before.

(II) Procedural law (evidence law) level

On June 16, 2021, the “People’s Court Online Litigation Rules” were introduced, and its judicial determination of blockchain depositions is specifically provided for in Article 16 to Article 19. In particular, Article 16 stipulates that if the electronic data submitted by the parties as evidence is stored through blockchain technology and has been verified to be consistent by technology, the people’s court may determine that the electronic data has not been tampered with after being uploaded to the chain, except where there is sufficient evidence to the contrary to disprove it.

In fact, as early as 2018, the Supreme Court issued the “Supreme People’s Court on the Internet Court hearing cases on a number of issues” in Article 11 provides that the parties submit electronic data, through electronic signatures, trusted time stamps, hash value verification, blockchain and other technical means of evidence collection, fixing and anti-tampering or through the electronic forensic deposition platform authentication, can prove its authenticity, the Internet Court shall confirm.

The difference between the two provisions is that, firstly, the scope of the court has been expanded and is no longer limited to the Internet Court, but extended to all courts. Second, the rule of presumption of authenticity of evidence in the form of blockchain (electronic data) is formally established. Under the 2018 regulations, even if the parties or the authorities handling the case propose that the electronic data is collected and fixed in the form of blockchain, they still have to bear the burden of proving the authenticity of the evidence, and in practice the court has to approve the authenticity of the blockchain evidence, not without some arguments. And under the new provisions of 2021, the court can directly presume that the electronic evidence on the chain has not been tampered with, and in turn to be rebutted by the opposing party to present evidence to the contrary.

Further, in many blockchain-related disputes and blockchain-related crimes, the electronic data to be used to determine the case itself is generated on the chain, such as smart crime contracts, such as coins and the flow of coins, for this part of the evidence, the provision also presumes its authenticity, and this kind of evidence in fact does not have a so-called “chain” process, so it is very difficult to find evidence to the contrary to overturn.

In the context of China’s evidence law, the examination of evidence is often divided into the judgment of the legality (the evidence is qualified for court access), authenticity (the evidence has not been tampered with) and relevance (the evidence is related to the case). In this way, the article takes the form of judicial interpretation of blockchain evidence as a form of electronic data and recognizes its legality; the authenticity of blockchain evidence on the chain is presumed; as for the remaining element of relevance, it is to be judged specifically in individual cases.

Third, written in the end: the future of digital currency legal documents?

The year 2021 should be the first year that blockchain and digital currency are widely debuted in laws, administrative regulations, judicial interpretations and other higher-level legal documents. In practice, the situation that judicial authorities make different decisions on evidence, disputes and crimes involving blockchain and digital currency may gradually become history. At the same time, the successive introduction of specific legal documents and legal provisions also reflects the determination of public security and judicial organs to combat related crimes. Blockchain industry practitioners should be proactive, focus on the analysis of their own criminal risks and compliance system, and seek help from professional lawyer teams when necessary.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/whats-new-in-digital-currency-law/
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