A login operation in the early hours of 2024 turned a case of "trusted management" in Qingdao into a genuine criminal theft case. The victim, Feng, entrusted his Bitcoin wallet to an acquaintance, Zhang, for assistance. During the process, Zhang gained access to core information such as the mnemonic phrase. Subsequently, in the early morning hours of a certain day, Zhang logged into the wallet multiple times and transferred all 107 Bitcoins out — which, based on the market value at the time of the incident, amounted to approximately 22.54 million yuan. Afterward, the stolen assets were split and transferred into multiple addresses and platform accounts, with some eventually converted into RMB, with illegal gains identified to be over 660,000 yuan. The case was prosecuted by the LiCang District Procuratorate in Qingdao, where the prosecution tracked funds through on-chain transfer and conversion records. The court affirmed the classification of the crime as theft and sentenced Zhang to 10 years and 9 months in prison, along with a fine of 100,000 yuan. More importantly, in the publicly available judgement summary, the court clearly stated that "digital assets such as Bitcoin have property attributes and can be the objects of theft and other property crimes." Despite regulatory agencies having reiterated that Bitcoin does not possess the status of legal tender, this statement is viewed as a typical example of formally recognizing its property attributes in the criminal field, and several observers interpret it as a significant signal that China's judicial environment for digital assets is becoming clearer.

From Trusted Management to Theft: How 107 Bitcoins Were Transferred

Before entering the judicial process, this case was originally just a matter of "an acquaintance helping out." Feng, unfamiliar with digital asset operations, entrusted his Bitcoin wallet to his acquaintance Zhang for management. During the multiple assistances, Zhang came into contact with and mastered key information like the wallet's mnemonic phrase. The case materials indicate that in the early hours of a certain day in 2024, he used this information to log into Feng's wallet multiple times and transferred 107 Bitcoins in batches out. On the surface, it appeared to be merely "technical operation," but in essence, it quietly severed Feng's control over his assets.

The true clarity emerged in the subsequent restoration of the funding path. According to public reports, the 107 Bitcoins were first transferred in batches to multiple accounts and platforms, then underwent multiple rounds of disaggregation and transfer. A portion was ultimately exchanged for RMB on the platform; the verifiable exchange proceeds amounted to approximately 660,000 yuan. The procuratorial agency tracked these transfer and fiat conversion records, piecing together the complete path from Bitcoin theft to exchange, contrasting sharply with Zhang's claim of "temporary protective takeover due to risk considerations": if it was indeed a protective operation, there would have been no need to split the assets, transfer across accounts, and convert them into RMB, and this series of actions constituted a typical implementation path of "conversion for personal use." Furthermore, it was one of the key supports for the court’s final determination of Zhang's illicit possession intent.

22.54 Million or 660,000: Amount Determination Affects Sentencing Scale

Looking back along this funding chain, the most striking aspect is actually the huge discrepancy between two numbers: at the time of the incident, 107 Bitcoins were estimated by multiple media outlets to be worth approximately 22.54 million yuan based on the current market price; however, following the on-chain transfer and platform records, the illicit gains recognized through conversions back to legal tender amounted to only over 660,000 yuan. The former represents "book value," while the latter reflects "cash on hand," and in traditional theft cases, these two figures are often closely aligned. However, with highly volatile digital assets, they can be completely different magnitudes.

For criminal justice, this is not merely a mathematical problem, but a key variable that directly affects sentencing levels. In Chinese criminal law, sentencing for theft is highly correlated with the amount involved, and crossing even a single amount threshold can lead to completely different sentencing for the defendant. Theoretically, if 22.54 million yuan were deemed the "amount involved," compared to citing 660,000 yuan as the main reference, the corresponding sentencing range would logically exhibit a significant difference. However, the existing public materials have not disclosed which amount was primarily considered during the sentencing of this case; the media's assertion of "more likely based on actual proceeds from sales" remains an external interpretation yet to be validated. What is certain is that the choice between "market value estimation" and "actual monetization" is becoming a new challenge in digital asset cases, and similar disputes are likely to reappear in more cases, continuously testing the scale and stability of judicial practice for a considerable time.

Not Currency but Still Property: Bitcoin's Placement in Chinese Law

Before the debate of "should valuation be based on market price or actual monetization," a more fundamental question had long confronted digital asset cases: what exactly is Bitcoin within the Chinese legal system? The regulatory stance is relatively clear — China's central bank and other ministries have repeatedly stated that Bitcoin does not hold the same legal status as legal tender and cannot circulate freely in the market as currency. However, judicial practice did not simply stop at "not currency," but instead sidestepped the currency attribute and sought a placement for the disputed asset from the perspective of "property" and "property interests."

In many past civil disputes, courts have often recognized parties' rights to digital assets based on "property interests" or "legally held specific property." According to the overall trend presented in public judgment documents, this type of asset’s property attributes have gradually been recognized in civil fields. The particularity of this case is that this logic was documented for the first time in a very explicit way within theft-related criminal judgments: the court directly established that Bitcoin and other digital assets possess property attributes and can be objects of theft offenses and other property crimes. The signal it conveys is that even without recognizing its currency attributes, the judiciary can still regulate Bitcoin within the existing criminal law framework as protected property. Thus, this case becomes a typical example of recognizing the property attributes of digital assets in the criminal field, providing a referable adjudication path for future cases involving "on-chain assets being transferred away," and indicating that civil and criminal cases surrounding digital assets are gradually forming a relatively stable judicial stance within existing legal provisions.

Chasing People Along Transaction Paths: How On-Chain Clues Support Conviction

While establishing the property attributes, what truly "locked in" Zhang's responsibility was that funding path pieced together bit by bit. After the incident, the procuratorial agency conducted a "fund chain tracking" based on materials transferred from public security investigations, tracing the transfer records of the 107 Bitcoins following their transfer and subsequent legal tender exchanges, connecting every on-chain transfer and every platform transaction. Public reports indicate that starting from Feng's wallet address, multiple intermediary addresses and platform accounts were reached, leading to the final account that exchanged profits of over 660,000 yuan, resulting in a restored closed path, where every step of the funds could find corresponding "settlement points" in account books and platform transactions.

It is this path that breaks down Zhang's defense of "just temporary custody, later to be returned." If it were a protective takeover, the assets would remain in a controllable state ready for return, rather than being split, transferred across multiple platforms and addresses, partially exchanged for RMB and flowing into personal accounts. The publicly available on-chain ledger provides an unalterable chronological order and direction of transfers, while transaction platforms fulfill key details like account identities and withdrawal destinations. The combination of both makes the intent of "dispersing transfers to obscure origin" glaringly evident. This case therefore demonstrates that in the field of digital assets, even if suspects attempt to "clean up" transfer records through multiple transitions, the transparency of the ledger structure makes it difficult to escape traceability; as long as on-chain data effectively cooperates with traditional evidence-gathering methods, the intent of illegal possession will ultimately be restored and evaluated criminally.

From a Theft to an Industry Alarm: The Edge of Trust in Custody and Compliance

Returning to this case between acquaintances offers a more intuitive understanding of its impact on the industry: Feng, precisely due to the trust in "trusted management," surrendered the operational control of his wallet and the mnemonic phrase, thus allowing Zhang multiple logins to the wallet in the early hours of 2024 and the opportunity to transfer away 107 Bitcoins. Following the leaks of mnemonic phrases and private keys, the assets were split and transferred to multiple addresses, some later exchanged for RMB, a reversal that was nearly impossible technically and whose loss was difficult to detect in time. For the average coinholder, the most acute reminder from this case is not "don't get stolen," but to realize that once core permissions are handed over to any third party, whether a platform or an acquaintance, it effectively ties asset security completely to personal credit. Once trust declines, on-chain transparency can only help restore the truth, but cannot "get the coins back." For industry professionals and anyone dealing with others' assets, the outcome of a 10-year and 9-month fixed-term sentence plus a fine of 100,000 yuan sends a clear signal: infringing on others’ digital assets will be placed under the same level of criminal accountability as traditional property crimes, and claims of "protective takeover" or "technical operation" are unlikely to serve as a cover. Looking at a longer timeline, in recent years, judgment documents across various regions have increasingly handled digital asset disputes from the perspective of "property" or "property interests," and this case stands as one of the typical examples in the criminal domain, further solidifying this trend. What remains to be observed is whether sentencing scales for similar cases will tend to unify across different regions and whether the judicial interpretations surrounding "property attributes of digital assets" will be further refined and solidified in future rulings.

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