A criminal theft case in Fuzhou has drawn a very clear legal red line regarding the custodial relationship of encrypted assets. At the end of 2020, due to a demand for liquidation, Wang entrusted his Bitcoin holdings to an acquaintance, Lin, for "assistance in trading," allowing Lin access to his computer and Bitcoin wallet hard drive under the pretext of helping to realize the asset's value. Lin used this opportunity to steal the wallet key and related data, quietly transferring four Bitcoins, illegally profiting about 900,000 RMB, and was ultimately investigated by the police and prosecuted for theft. The People's Court of Cangshan District, Fuzhou, found him guilty of theft in the first instance, sentencing him to 12 years and 7 months in prison, and imposing a fine of 300,000 RMB; after Lin appealed, the second-instance court upheld the original sentence, confirming that there were no improper actions in the factual determination, legal qualification, and sentencing. More significantly, the court explicitly stated in its judgment that while Bitcoin is not legal tender, it possesses characteristics of value, manageability, and transferability, meeting the criteria of "property" under criminal law, making it an object of criminal offenses. In the context of China's ban on token trading and related businesses starting in 2021, qualifying such activities as illegal financial activity, this case of "four coins leading to twelve years and seven months" sends a very direct signal: regulations can strictly prohibit related financial activities, but the judiciary will still regard these assets as property that can be illegally possessed and will crack down severely on encroachment and theft, which is a compliance warning that cannot be ignored for custodians of tokens and ordinary holders who habitually delegate their private keys to others for operation.

The Court Recognizes Bitcoin as a Property Object

During the trial, the judge did not linger on the contentious point of "whether Bitcoin is currency," but rather reverted to the general standard of "property" in criminal law: whether it has value, manageability, and transferability. The judgment clearly states that although Bitcoin does not have legal tender status, it can be converted into approximately 900,000 RMB in reality, satisfying the "value" criterion; it can be exclusively controlled by specific entities based on private keys and wallet applications, complying with "manageability"; and it can be transferred between different parties through on-chain transactions, possessing "transferability." Under this three-step reasoning, the court concluded that Bitcoin meets the characteristics of "property" in the context of criminal law and can be an object of crimes like theft; the prohibition by regulatory authorities of it being traded as a financial product does not hinder criminal law from providing property protection.

This determination is not an isolated case. Although token-related financial activities have been completely halted in China since 2021, many cases in judicial practice have been handled similarly: converting the involved tokens into RMB amounts, counting them toward the victim’s losses, and subsequently determining the amount and sentencing levels for crimes like theft, fraud, and illegal fundraising. In this case, four Bitcoins were converted into approximately 900,000 RMB, ultimately resulting in a heavy sentence of 12 years and 7 months, solidifying the demonstrative effect of this judicial position: as long as something possesses the property attribute that can be illegally occupied, regardless of whether regulations permit its trading, any unauthorized transfer or occupation will be treated as "stealing someone else's property," and will not be seen as legally ambiguous simply because the object is a token.

Four Bitcoins Leading to a Twelve-Year Heavy Sentence

For many involved in this case, the most striking group of numbers is not "four Bitcoins" but "12 years and 7 months." In the first trial, the People's Court of Cangshan District, Fuzhou, found Lin to have illegally transferred four Bitcoins, equivalent to approximately 900,000 RMB, sentencing him to 12 years and 7 months for theft and imposing a fine of 300,000 RMB. According to the grading logic of China's criminal law regarding theft, the involved amount is key for sentencing; in other similar cases, thefts of cryptocurrency of similar amounts often result in sentences of only a few years of imprisonment, making this case's sentence clearly weighty, nearly eliminating any potential for leniency regarding "token cases."

Crucially, after Lin appealed, the second-instance court chose to uphold the original ruling, clearly stating that there were no improprieties in the first-instance findings of fact, legal application, and sentencing, indicating that the judiciary did not just "misjudge once," but is consciously sending a signal of strict crackdown. For those with technical expertise, employees of custodial or security service firms, and those involved in delegated holding and management as "helpful acquaintances," such a ruling carries a direct deterrent effect: if one misuses private keys, system backends, or custodial conveniences to unlawfully transfer client assets, even if the object is a token prohibited from trading, the criminal consequences may still be assessed according to the traditional high limits for theft; once the technical advantages transgress the boundaries of trust and authorization, the judiciary will view it as a source of severe criminal risks infringing property rights.

Criminal Law Protection Under Complete Trading Suspension

From the regulatory perspective, the institutional background in this case is primarily characterized by the complete suspension of trading activities. Since 2021, the People’s Bank of China and other departments have uniformly classified any activities related to tokens as illegal financial activities through numerous notices and announcements, and all platform services providing trading, pricing, derivatives, account systems, etc., have been thoroughly halted, with this stance remaining unchanged until 2026. Superficially, this means that the Bitcoin involved in the case lacks legal trading scenarios within China, and cannot be included in any licensed financial institution's standard product system, yet it still exists realistically in personal computers and cold wallets, becoming an object that the police must confront during investigations and prosecutions.

The tension appears here: on one side, there is administrative regulation's "zero tolerance" for the financial attributes of tokens; on the other side, there is criminal law's clear acknowledgment of their property attributes. In this case, the two levels of courts in Fuzhou determined that although Bitcoin is not legal tender, it possesses value, manageability, and transferability, meeting the criteria for being illegally occupied as "property." Based on this, Lin's actions of transferring four Bitcoins and illegally profiting approximately 900,000 RMB were evaluated as theft, with a response of 12 years and 7 months of imprisonment. Correspondingly, in previous cases involving fraud and illegal fundraising concerning crypto assets, courts have consistently converted tokens to RMB amounts, incorporating them into the case amount for the determination of charges, sentencing, and recovery efforts. This has created a clear realistic pattern: at the regulatory level, tokens cannot be organized into any form of financial activity within the country; at the judicial level, once theft, fraud, or embezzlement occurs, their value will be fully encompassed within criminal protection, applying the same sentencing standards as traditional high-value property crimes. For practitioners, this "dual track" state signifies that "being banned administratively" cannot be used as a reason to weaken criminal liability, nor can tokens be viewed as "gray assets" outside the law; any attempt to conduct unauthorized transactions will face the risk of illegal financial regulation, and once individuals come into contact with others' private keys or backend privileges, unauthorized transfers will be regarded under criminal law as direct infringement of protected property rights.

A Warning from Commissioning to Liquidate as the Incident Entry Point

According to media reports, at the end of 2020, due to his unfamiliarity with the transaction process, Wang chose the "acquaintance route," entrusting Lin to assist in liquidating his Bitcoin holdings. To facilitate operations, he allowed Lin access to his computer and the hard drive of his Bitcoin wallet, effectively exposing the "keyhole" for the actual control of the assets to Lin without any written agreement or risk control constraints. It was precisely during this seemingly ordinary assistance that Lin stole the wallet key and related data, subsequently transferring four Bitcoins and illegally profiting approximately 900,000 RMB, thus igniting the criminal risk of the case.

This scenario is a very intuitive warning for today’s participants still using "acquaintance custody," "helpful selling," and "offline matchmaking": in non-professional institutions, without contracts and compliance systems in place, the party with superior technology can easily seize private keys without detection, and the boundary between the trustee and the entrusted assets almost completely relies on personal trust. In the event of unauthorized transfers, judicial authorities in similar cases often handle the matter as theft, applying property crime standards and converting amounts into RMB for sentencing levels. For individuals acting as OTC intermediaries, matchmakers, or helpful sellers, as long as your role involves access to another's computer, hard drive, or any form of private key or backend access, you are already standing at the double legal red line of criminal law and financial regulation; any unauthorized possession behavior will be regarded as direct infringement of protected property, rather than merely a matter of "unclear accounts" at the civil dispute level.

How Platforms and Users Can Rebuild Safety Boundaries

This case in Fuzhou illustrates that the truly fatal issue lies not in sophisticated technical attacks, but in the offline contact of "handing over the computer and wallet hard drive to someone else." Within China, institutions providing services related to encrypted assets generally find it difficult to obtain formal financial licenses and can only exist under the guise of technology and security services, with the law not illuminating the entire business process and instead imposing higher demands on internal control. Any entity acting as a custodian, wallet service provider, or technical "agent" must treat access to user computers, hard drives, private keys, or system backends with utmost caution: as a routine measure, multiple signatures, permission separation, and operational log retention should be implemented to dismantle the structure that allows "one person to quietly transfer assets." Otherwise, should internal personnel like Lin utilize their acquired keys to secretly transfer assets, under current judicial practice, this will often be pursued as property crimes like theft and embezzlement, rather than being treated as mere civil disputes or "contractual controversies."

For individual users, the risk precisely stems from misjudging this structure. The case originated from informal commissioning for liquidation and acquaintance relationships; lacking professional custodial institutions and strict contractual constraints, the party with superior technology and mastery of the private key can easily turn "helping you liquidate" into "seizing possession." Given the current regulatory environment in China, where token-related financial activities have been completely halted, the judiciary still explicitly regards Bitcoin as property that can be illegally possessed, thereby pursuing criminal responsibility. This means that once full control is transferred to a single "acquaintance" or unregulated entity, when issues arise, you will face not only asset losses but also real challenges like difficulty in providing evidence and lengthy asset recovery periods. The most pragmatic "compliance self-rescue" for ordinary holders is to avoid handing over complete private keys or backend access to any single role, and in any situation requiring "custody, selling, or investing on behalf," to separate control power from operational authority, limiting the pool of potential wrongdoers and minimizing the amounts and traces, because under the current judicial path, those who misuse private keys to unlawfully transfer others' assets will bear direct consequences for theft or embezzlement.

From Isolated Cases to Norms: Trends in Judiciary for Cryptocurrency Cases

The signal released by the Fuzhou Lin case is quite direct: firstly, Bitcoin has once again been explicitly included by the court as "property" under criminal law, and like numerous previous cases, it is regarded in monetary terms equivalent to RMB for determining the case amount; the second-instance court upheld the original judgment, reinforcing this recognition as a predictable rule at the local level; secondly, the sentence of 12 years and 7 months for about 900,000 RMB corresponding with a fine of 300,000 RMB positions the act of "mastering another's private key yet transferring without permission" within the heavy sentencing range, forming a high-pressure deterrent against the party with technological advantages; thirdly, against the background since 2021 where token trading and related businesses have been classified as illegal financial activities and maintaining this prohibition until 2026, the judiciary still provides criminal law protections for crypto assets that are unlawfully occupied, constituting a regulatory-judicial one-two punch of "business forbidden, property still protected." Looking ahead, cases involving theft, fraud, illegal fundraising, and other charges concerning cryptocurrencies have begun to enter the judicial eye, and courts generally convert the tokens involved into RMB amounts; in the continuously accumulating judgments, this will gradually clarify their positioning within both criminal and civil law systems. However, differences in amount determination and sentencing standards across regions, coupled with challenges in recovering and freezing assets due to cross-border transfers, anonymous addresses, and multi-chain assets, as well as whether regulatory rules will delineate finer boundaries between technological services and financial businesses, remain unresolved variables. Under this dual constraint of "prohibiting the conduct of related financial activities but rigidly holding accountable once others' assets are occupied," platforms, practitioners, and ordinary users must re-examine their roles and operational modes, treating "what cannot be done" and "what criminal liabilities will arise if done" as the primary constraints in designing businesses and arranging custodial relationships.

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