Encryption Claims Dilemma: The Reality of Rights Protection Under the Conflict of Criminal and Civil Procedures
"Encrypted Claims Dilemma: The Reality of Rights Protection Amidst Criminal-Civil Procedure Conflicts"
This article examines the challenges victims face in seeking legal recourse for cryptocurrency theft or fraud in China, highlighting the tension between criminal and civil procedures. Through two representative cases, it illustrates how cross-jurisdictional complexities and regulatory ambiguities often hinder effective relief.
In Case 1, a South Korean company paid 800,000 USDT to a Chinese employee of an S-based exchange for listing services, only to have the employee disappear. Despite legal efforts citing属地管辖 (territorial jurisdiction) and the property-like status of virtual assets under China’s "9.24 Notice," local police initially refused to accept the case due to the foreign elements involved. After persistent advocacy, the case was accepted but not formally立案 (registered).
Case 2 involved a woman scammed out of over 3 million RMB while attempting to purchase USDT through an OTC trader for investment. While the trader was arrested, the main fraudster remained abroad. Civil action against the trader for unjust enrichment failed, as courts cited the "criminal-first" principle (刑事优先), requiring criminal resolution before civil claims can proceed.
The analysis reveals that civil remedies are often impractical when criminal elements are involved: courts may transfer such cases to police, and even successful criminal convictions may not guarantee restitution if perpetrators lack assets. The author concludes that, despite guides on civil litigation, pursuing criminal avenues remains the more viable—though still fraught—path for victims seeking recovery.
The piece underscores systemic hurdles, including judicial reluctance to recognize crypto-related claims and procedural barriers, urging greater clarity in legal frameworks to protect victims.
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