China Court Classifies Bitcoin as Property, Enabling Theft Prosecutions

Published by James Harris on June 8, 2026June 8, 2026

A Chinese court has sentenced a man to nearly 11 years in prison for stealing 107 Bitcoin by memorizing most of his victim’s seed phrase over his shoulder, then brute-forcing the final word overnight. The theft netted him roughly 660,000 yuan after selling the coins; the Bitcoin itself was worth approximately 22.54 million yuan at the time.

The more consequential part of the case is not the sentence but the legal reasoning behind it. Prosecutors in Licang successfully argued that Bitcoin qualifies as property under China’s criminal code because it requires capital and computing power to acquire, carries measurable economic value, and can be exclusively controlled through private keys. The court agreed, which creates a workable template for prosecuting crypto theft even inside a jurisdiction that bans crypto trading entirely. China ran a similar legal maneuver in civil courts after the 2021 ban, with several rulings protecting crypto holders’ ownership claims while simultaneously refusing to enforce trading contracts. Criminal courts are now catching up to that framework, and the Supreme People’s Procuratorate flagging this case nationally suggests the property classification is being institutionalized, not treated as a one-off.

Cold storage protects against remote attackers. It offers no protection against the person in the room with you.

The valuation method prosecutors used deserves attention from anyone tracking how China handles future cases: rather than pegging criminal liability to the market value of the stolen coins (22.54 million yuan), they anchored it to the 660,000 yuan Zhang actually received. Legal observers in China are treating this as a potential sentencing precedent, which would systematically reduce the criminal exposure for crypto thieves who sell at a discount or through low-liquidity channels. That asymmetry could matter if the framework spreads. The Fuzhou case disclosed in May, where Lin received 12 years and seven months for stealing four Bitcoin via copied private keys, confirms this is not isolated jurisprudence but a developing pattern of seed-phrase and credential theft prosecutions reaching final verdicts.

The Supreme People’s Procuratorate’s decision to publicize Zhang’s case as a “new type of virtual currency theft” is a signal that national-level prosecutors want lower courts to handle these cases consistently. Given the volume of crypto held by Chinese nationals through informal channels despite the trading ban, the practical demand for that consistency is larger than the ban would suggest.