In recent years, virtual asset criminal cases that combine the digital economy and job-related crimes, and job-related crime cases left over from the restructuring of state-owned enterprises have continued to enter the judicial trial process. They are two major subdivisions of defense for dereliction of duty crimes. The two types of cases are intertwined with multiple problems such as entity identification, electronic data evidence, disposal of property involved, and criminal-civilian overlap. The prosecution and defense are extremely controversial and are recognized as cutting-edge difficulties in the field of criminal defense.
In order to unify the defense ideas and polish the plan for cross-examination in court, the Jingshi Law Firm (National) Criminal Committee organized a special difficult case seminar**,focusing on two major and complex cases the Virtual Currency Embezzlement Case and the State-owned Enterprise Restructuring Corruption Case. A number of criminal defense lawyers conducted full debates on core issues such as subject identification, evidence review, crime selection, and recovery boundaries, and formed a series of practical defense viewpoints for ex changes and discussions with legal colleagues. ThisCriminal Defense Roundtable’s Fifth Symposium on New and Difficult Issues in Duty-Based Crime was hosted by Wang Xibin, Vice President of Jingshi Law Firm’s Criminal Defense Training Institute and Director of the Financial Crime Legal Affairs Department; Equity Partner of Jingshi Law Firm and Trainee Lawyer of Jingshi Law Firm (National)Li Yixian, chairman of the committee, and Yang Limin, partner lawyer of Jingshi Law Firm, served as sharing guests, respectively focusing on difficulties in digital currency embezzlement cases and defense methods for corruption and property cases; Director of theCriminal Committee of Langfang Lawyers AssociationLi Jing**, equity partner of Jingsh Law Firm, deputy director and secretary-general of the Criminal Committee of Jingsh Law Firm (National) Tao Kuan**, partner lawyerWu Yingcheng of Jingsh Law Firm, and deputy secretary-general of the Criminal Committee of Jingsh Law Firm (National)Wu Rangfangserved as panellists;Lawyers Peng Yunchuan, Shi Likang, Zheng Jingjing, Tian Xiangwen, Zhang Sha, Xing Yisu,Bai Kunyuand other lawyers participated in the seminar; in the end,Sun Jianzhangand Zheng Fei, equity partners of Jingsh Law Firm and deputy directors of the Criminal Committee of Jingsh Law Firm (National), summarized the seminar.
▲Conference site
▲Moderator: Wang Xibin, Vice President of the Criminal Defense Training Institute of Jingshi Law Firm and Director of the Financial Crime Legal Affairs Department
01**Virtual currency job embezzlement case: data or property?**The defense game of new digital assets
▲Li Yixian, equity partner of Jingsh Law Firm and director of Jingsh Law Firm (National) Trainee Lawyers Working Committee
Case Overview
The actual controller of the company outside the case invested more than 20 million yuan, entrusted a team to carry out virtual currency and NFT related businesses, and later established the company. The public prosecution agency accused the relevant personnel of taking advantage of their positions to transfer two Tether coins, constituting the crime of job embezzlement. The sentencing recommendation was more than ten years. The virtual currency involved was not realized and was only transferred between different digital assets.
This case has exposed several major practical pain points in criminal cases in the cryptocurrency industry: no labor contract, no social security, and how to determine official behavior when the boundary between partnership and labor relations is blurred; the determination of fundamental deception in the process of virtual currency transfer; and the existence of major flaws in the electronic data collection process. These situations will directly affect the determination of the facts of the entire case.
Core points of discussion Entity characterization: Virtual currency - electronic data or property in the sense of criminal law?Lawyers participating in the meeting formed a layered defense idea: **1. Distinguish between the realization status and determine the legal attributes:**The property attributes of virtual currencies are not disputed until they are fully realized and converted into legal currency; if they have not yet been realized and are only transferred between coins, priority should be given to identifying computer electronic data, which is not directly equivalent to the "unit property" protected by the crime of official embezzlement. There is room for defense in converting it to a misdemeanor crime of illegally obtaining computer information system data. At the same time, if there is actual misappropriation and the virtual currency has quantifiable value, even if it is not actually realized, it can still be classified as property in the sense of criminal law and can become the target of the crime of official embezzlement.
- Conduct a penetrating review of "the company's assets" and clarify the boundaries between personal assets and company assets. The funds are initially contributed by natural persons and deposited into personal exchange accounts, and the company is established later. The watershed should be based on the fact that the company was established: before the company is established, funds cannot be directly attributed to the company; even if the company is established, it must be examined whether the virtual currency is actually under the name of the company. Personal investment assets cannot be directly presumed to be unit property just because the company participates in management.
**3. Distinguish between cooperative relationship and job status.**There is no labor contract or social security payment record in this case, and the remuneration is paid directly in virtual currency. The defense should focus on demonstrating that the two parties are in a project cooperation relationship rather than an employment-labor relationship, so as to shake the foundation of the crime of job embezzlement from the level of subject elements. If it belongs to cooperation, the dispute is more likely to be a civil cooperation dispute.
**4. Joint crime and subjective intentional defense.**Regarding the facts of the second accusation, the defense can be launched from the perspective of excessive execution: some currency withdrawals and trading operations were carried out privately by other defendants, and the party Liu was not aware of some of the operations; the party argued that the partial virtual currency was part of the recovery of personal investment, and whether the purpose of illegal possession can be proven is the burden of proof on the prosecution. At the same time, distinguish between "misappropriation" and "misappropriation". If fundamental deception and permanent illegal possession cannot be proven, you can seek to defend yourself against the misdemeanor crime of misappropriation of funds. Procedural defense: The legality of electronic data collection is the key breakthrough in this case
According to the "Electronic Data Evidence Collection Rules for Public Security Organs Handling Criminal Cases", when requesting transaction information from an overseas platform, a receipt email from the platform must be obtained, along with an MD5 hash integrity check value to ensure that the electronic data is not tampered with.
Only the printed Excel form remains in the file of this case. The original emails and verification values are not completely attached. The form contains coding errors and incomplete flow, and no on-chain data verification has been carried out.
Defense Tips:
- This type of Excel printout is derived evidence and cannot be used alone as the basis for finalizing a case if it is not supported by the original electronic data and integrity check value;
- Electronic data expert assistants can be hired to issue special cross-examination opinions and raise objections to the authenticity and integrity of the data;
- Even if the subsequent investigation agency supplements the materials, it can still raise the defense that re-obtaining evidence risks destroying the original data.
Other procedural disputesThe study also assessed the practical difficulty of changing jurisdiction at the trial stage; it also reminded that even if electronic data evidence is partially excluded, the defendant's confession, chat records and other evidence in the file will still exist. The defense needs to set up a stepped plan of "not guilty-misdemeanor" and cannot completely rely on the exclusion of evidence.02 Corruption case of state-owned enterprise restructuring: crimes left over from restructuring, how to deal with the property involved under the intersection of criminal and civil crimes?
▲Yang Limin, partner lawyer of Jingsh Law Firm
Case Overview During the state-owned enterprise restructuring in 2009, Zhang acquired equity through an equity exchange. The prosecution accused him of embezzling more than 90 million yuan in state-owned assets by underestimating and concealing state-owned assets. His ex-wife Lu divorced in 2006 and was accused of being an accomplice in corruption involving a total amount of 19.18 million yuan. The case has been in court but has not yet been pronounced. Lu did not participate in the restructuring process that year, and the alleged act of assisting in asset disposal occurred several years after the restructuring was completed.Core Focus of the SeminarDetermination of accomplice: Can an accomplice in corruption be established by assisting in the disposal of assets after the event?Core logic of defense:
- Lu is not a state employee and does not meet the subject requirements for the crime of corruption;
- The restructuring and embezzlement of state-owned assets was completed in 2007-2009, and Lu’s involvement in related matters occurred after 2011, and he did not participate in the entire process of restructuring planning, equity acquisition, and asset concealment;
- If there is no subjective complicity in the corruption in the restructuring stage, and only participates in the disposal of assets after the crime is completed, it does not constitute an accomplice in the crime of corruption. At most, it may only be evaluated as covering up and concealing the proceeds of crime, and achieving a downgrade of the crime.
Criminal and Civil Crossing: Can a criminal judgment directly negate the validity of an equity transfer contract? The participating lawyers reached a consensus: Criminal trials only deal with conviction and sentencing, collection of refunds and compensation, and do not directly rule on the invalidation of civil contracts. Whether the equity transfer agreement is invalid or not is within the scope of civil litigation. Interested parties need to file a separate civil lawsuit to claim their rights. A criminal judgment will not directly negate the validity of the civil transaction.
Four practical boundaries for the recovery of illegal income
- The scope of recovery is limited: only the illegal gains and interests corresponding to corruption will be recovered, that is, the value of state-owned assets that were underestimated and concealed during the restructuring, and not all the assets of the company after the restructuring will be collected;
- Distinguish between legal investment and illegal assets: If the actor subsequently invests his own legal funds into the enterprise, if the distinction can be audited, the legal investment should be considered; the assets have been transferred to the name of a bona fide third party, and the good faith should be protected to gain effect, and criminal recovery cannot break the already formed market transaction order;
- Civil actions such as external mortgages and financing have priority, and criminal recovery cannot compete with legal mortgage rights;
- Recovery must have a valid judgment as the basis for execution. Without a judgment, the enforcement agency has no right to directly dispose of the assets of the enterprise involved.
Practical Risk Tips If the funds transferred out during the business operation are normal business transactions and are not deliberately concealed to avoid recovery, criminal liability will not be aggravated; if there is a related criminal case, it is important not to convert operating income into virtual currency and other difficult-to-track assets, which will easily be deemed to have evaded recovery, bringing additional criminal risks. If assets need to be disposed of, it is recommended to entrust a third-party agency to evaluate them and retain evidence of fair transactions.Seminar Guests
Li Jing, Director of the Criminal Committee of Langfang Lawyers Association
Tao Kuan, equity partner of Jingsh Law Firm, deputy director and secretary-general of the Criminal Committee of Jingsh Law Firm (National)
Wu Yingcheng, partner lawyer of Jingsh Law Firm
Wu Rangfang, deputy secretary-general of the Criminal Committee of Jingshi Law Firm (National)
03**Seminar summary:**Ladder defense thinking for complex job crimes
▲Sun Jianzhang, equity partner of Jingsh Law Firm and deputy director of the Criminal Committee of Jingsh Law Firm (National)
▲Zheng Fei, equity partner of Jingsh Law Firm and deputy director of the Criminal Committee of Jingsh Law Firm (National)
Two difficult cases have brought many inspirations to criminal defense practice:
- For new digital asset cases, do not stick to the traditional mindset of property crime. Virtual currency cases should make full use of the dual attribute disputes of "data/property", build a layered defense plan, and work simultaneously from multiple angles such as innocence, misdemeanor conversion, subjective elements, and legality of evidence. All hopes cannot be placed on a single defense point.
- Electronic data cross-examination should focus on the source. Hash check value, original carrier, platform receipt, and on-chain verification are the core of the three properties of evidence in this type of case; derived forms and printouts cannot replace the original electronic data.
- In cases of corruption left over from history during restructuring, clarifying the timeline is the starting point for defense. Distinguishing between the "commission stage of the crime" and "behavior after the completion of the crime" is an important way to cut off the causal relationship between accomplices; when dealing with the property involved in the case, it is necessary to establish an awareness of the criminal-civilian boundary and distinguish between recovery, refund and civil contract effectiveness.
- Faced with the ambiguity in judicial practice, defense lawyers must not only dare to raise a plea of not guilty, but also respect the actual judicial environment and set up alternative defense plans for minor crimes and conversion of charges to maximize the interests of the parties.
The two cases discussed in this issue reflect the new challenges of criminal justice under the intersection of digital economy and the history of restructuring. Defense lawyers need to not only study the details of the evidence, but also grasp the logic of the system and seek the best solution in the murky zone between guilt and innocence. The Criminal Committee of Jingshi Law Firm (National) will continue to focus on cutting-edge and difficult cases and promote the in-depth development of professional defense. We look forward to the criminal law achieving a more refined balance between punishing crimes and protecting rights, so that every defense becomes a small footnote to the progress of the rule of law. The road to rule of law is long, but professionalism and perseverance can only live up to the trust.