According to a report by Shandong Legal News, the Qingdao Licang District People's Procuratorate recently prosecuted a Bitcoin theft case, resulting in a first-instance verdict. Defendant Zhang was sentenced to ten years and nine months in prison for larceny and fined 100,000 yuan. The case has become a typical example of cracking down on virtual currency crimes in the Qingdao area, reinforcing the legal status of virtual property under Chinese criminal law.
Insider Theft: 107 BTC Stolen Using Secretly Recorded Seed Phrase
The incident traces back to an early morning in 2024 when victim Feng discovered his cryptocurrency wallet had been accessed without authorization and all 107 Bitcoins transferred out. At the then market price, these coins were worth approximately 22.54 million yuan. Investigation revealed that Feng, unfamiliar with wallet management, had previously asked his acquaintance Zhang for help. During the registration process, Zhang secretly noted down the wallet's seed phrase. On the night of the crime, after multiple attempts, he succeeded in unlocking the wallet and moved the Bitcoins to addresses under his control.
Upon arrest, Zhang claimed he was merely performing a "protective takeover" to guard the Bitcoins from other thieves, denying any intent to steal. However, prosecutors traced a chain of rapid transfers: the stolen 107 BTC were routed through multiple addresses and quickly cashed out through over-the-counter deals, ultimately converting to 660,000 yuan. The clear trail of converting stolen digital assets into cash directly contradicted his defense and established criminal intent.
Legal Ruling: Bitcoin Qualifies as "Property" Under Criminal Law, With Sentence Based on Realized Proceeds
In court, prosecutors argued that Bitcoin, though virtual, possesses distinct economic value, can be exclusively controlled, and is readily exchangeable for fiat money—characteristics that meet the essential criteria of "property" in the Criminal Law. Therefore, the act of stealing Bitcoin constitutes the crime of larceny. Notably, the court adopted the actual cash-out amount of 660,000 yuan, rather than the much higher market valuation at the time of theft, as the basis for determining the theft amount. This approach takes into account the volatility of cryptocurrency prices and the practical difficulties in recovering digital assets.
After the first-instance judgment, Zhang appealed. In November 2025, the Qingdao Intermediate People's Court dismissed the appeal and upheld the original verdict. The ruling sends a clear judicial message: all activities involving virtual currencies must comply with the law, and stealing others' virtual property—no matter how technically sophisticated—constitutes criminal theft punishable under the law. The case serves as a landmark precedent affirming that virtual assets are not beyond the reach of traditional criminal legislation.