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Author: Liu Yang
The author since2024Over the years, we have represented many cases involving currency circle company personnel suspected of job embezzlement, and have achieved good defense results.Since the beginning of this year, the number of such cases has gradually increased, and some cases that were originally charged with other crimes during the investigation, transfer, review and prosecution stages may face the risk of infringement of judgment duties.In view of this, the author talks about his understanding from the perspective of legal interest protection for the crime of occupational embezzlement, hoping that the judicial authorities will have a deep understanding of the operation model and capital transaction model of the currency industry, and whether the perpetrators can be punished for their crimes or exempted from criminal punishment.
1. The legislative intent and legal interest protection of the crime of occupational embezzlement
1997The Criminal Law of 2009 separated the original crime of corruption from the behavior of non-state employees and established the crime of official embezzlement, filling the gap in the protection of non-public economic property..2020The 11th Amendment to the Criminal Law of 2016 unified the standards for criminalization into3million, reflecting equal judicial protection for state-owned enterprises and private enterprises.From a historical perspective,One isFrom the protection of identity to the equality of property rights, the crime of official embezzlement breaks through the tradition of giving priority to the public-owned economy and establishes the equal status of property rights of various market entities.The second isSentencing is refined, and through the linkage of three levels of sentencing, fines and case filing standards, the punishment for the crime can be adapted to the crime.The third isThe practical orientation is obvious. By clarifying the boundaries of “position convenience”, we can prevent the abuse of crimes.
From the perspective of legal interest protection, the crime of occupational embezzlement includes at least two connotations:
One is the property ownership of the unit.The purpose of criminal law is to protect legal interests, and crimes must first be infringing upon legal interests.In criminal law theory, the legal interests of the crime of embezzlement can be summarized as the theory of single legal interest infringement and the theory of double legal interest infringement.The single legal interest infringement theory holds that what the crime of official embezzlement infringes is the property rights of the unit.The theory of double legal interest infringement can be divided into the theory of violation of public power and the theory of violation of the principle of good faith.The theory of violation of public power holds that the crime of official embezzlement not only infringes upon the property rights and interests of the unit, but also violates the rights conferred by the law because of the specific identity stipulated in the criminal law; the theory of violation of the principle of good faith holds that in addition to the infringement of property rights and interests, the perpetrator violates the principle of good faith and good faith that he should abide by in his official behavior.No matter which theory is adopted, if the perpetrator does not illegally possess the property of the unit, his behavior will certainly not constitute the crime of official embezzlement.
The second is the compliance of job behavior.Among them, the compliance of job conduct is generally considered to include:“Taking advantage of one’s position” must be based on the authorization of the unit. Behavior without the authorization of the unit shall not constitute the crime of job embezzlement. The extension of “compliance” includes that the job behavior itself does not violate the prohibitive provisions of laws, administrative regulations, and departmental rules. That is, the behavior that the company authorizes employees to engage in itself should not be illegal.
2. The operating model of currency circle companies and the capital transaction model of virtual currency
The defender believes that if the judiciary wants to handle the case well and thoroughly and withstand the test of history, cases targeting virtual currencies must go deep into the industry, conduct sufficient research and demonstration, and ensure that the judgment is consistent with the simple understanding of industry insiders, that is, it conforms to the principle of consistency between subjectivity and objectivity.
The current general operating model of companies in the currency circle is distributed office. Usually the bosses are overseas and employees are scattered around the world, including employees in China. Daily work communication relies on encrypted communication tools or encrypted mailboxes, and fund payments are generally in virtual currency rather than legal currency.Domestic staff will establish relevant companies based on the needs of daily signing of contracts, payment of employee wages and payment of social security. However, the fundamental purpose of establishing the company is not for daily business activities recognized by the public. In order to avoid risks, employees often do not directly sign labor contracts with the company.The author believes that a company established based on virtual currency activities is essentially a form in which people engaged in virtual currency activities have to establish a company due to some reasons not directly related to the business itself in the process of business development. The company is not necessary in its business activities.What’s more, some cryptocurrency companies are established to connect jurisdiction over criminal cases.
Based on virtual currencyAccording to the principle of “private key is wealth”, it is impossible for any currency circle boss to hand over his virtual currency to other personnel for management. During business operations, when money is needed, the boss will pay directly.Of course, sometimes the boss will pay the virtual currency to the company’s financial personnel, and then the financial personnel will pay. This seems to have certain so-called financial system and company characteristics, but what needs to be clarified is that the purpose of the company boss paying virtual currency to the financial personnel is more for accounting.This is similar to the conflation of personality and property in traditional corporations.
3. Virtual currency should not belong to the legal interests protected by the crime of occupational embezzlement.
(1) Virtual currency should not belong to the currency circle“Unit property”
In the crime of embezzlement of employmentThe definition of “property of this unit” should adhere to the principle of substantive review.Since the identification of “property of this unit” is related to the crime or non-crime, as well as the severity of the sentence, judicial organs need to be particularly cautious in identifying “property of this unit” in the crime of official embezzlement.The author believes that when reviewing currency circle cases, the virtual currency used in the company’s operations cannot be equated with “the property of the unit”, but the ownership of the property should be examined through the appearance and substance.
The legal interest infringed by the crime of official embezzlement is the property rights of a company, enterprise or other unit. It requires the perpetrator to take advantage of his position to transfer all the company’s property to his own possession, instead of taking the assets of the actual controller of the company as his own.If the virtual digital currency involved in the case is paid by the company owner, and the profits generated by the project are directly attributed to the company owner, then regardless of whether there is a circulation process within the company or whether there is a corresponding financial system, the judicial authorities should focus on examining the chat records and email content involving the circulation of virtual currency, and analyze the objective evidence in the case one by one, rather than relying solely on the statements and explanations of the victim company.
The virtual currency account involved in the case is controlled by an individual, and the private key is owned by the individual. The company does not have the qualifications to legally open a virtual currency account. Therefore, the original property owner of the virtual currency is the relevant individual and has nothing to do with the company.“The technical architecture of the blockchain determines that only those who hold the private key can rewrite the semantic information on a specific account address.The view that blockchain digital assets are included in or applied by analogy to property rights ignores the fact that semantic information is not a specific thing, cannot be directly controlled, and is not completely exclusive.
The identification of property infringement crimes must be based on clear property ownership.In the case where there is a high degree of confusion between the personal property of the business operator and the company’s property, if there are frequent two-way exchanges between the personal property and the company’s property, and it is impossible to accurately distinguish whether the property involved is company property or personal property, then it is not appropriate to simply determine that the property involved is company property at the level of evidence, and it cannot be confirmed that the actor’s behavior has substantially infringed the ownership or use rights of the company’s property.
(2) The illegality of currency circle business makes it not a legal interest protected by the crime of official embezzlement.
2021year9month15On the same day, ten departments jointly issued the “Notice on Further Preventing and Dealing with Speculation Risks in Virtual Currency Transactions”. Article 1 of the notice clearly stipulates that the provision of services by overseas virtual currency exchanges to residents in my country through the Internet is also an illegal financial activity.Domestic staff of relevant overseas virtual currency exchanges, as well as legal persons, unincorporated organizations and natural persons who know or should know that they are engaged in virtual currency-related businesses and still provide marketing publicity, payment and settlement, technical support and other services, will be held accountable in accordance with the law.
The daily business content of currency circle companies is exactly the same as the above-mentioned prohibitive regulations. They are essentially engaged in illegal financial activities. Therefore, such shell companies do not have substantive business content and independent legal will. Their establishment purposes are illegal and should not be protected by law.Based on the company’s purpose of establishment, operating status, personnel structure, business activity certificates, etc., the formal legal person qualifications can be denied, and the ownership of the property involved should be comprehensively judged based on the flow of funds, account control relationships, etc.
Generally speaking, the establishment purpose of a company is legal. The legitimacy of the purpose means that the purpose of the establishment of the unit should comply with the requirements of the country, social public interests and public order and good customs, and cannot violate them.This is an essential element of corporate legitimacy.The legal personality of a company must meet the requirements for substantial establishment. If a defective company has problems such as shareholder defects, purpose defects, etc., its legal personality may be denied if the defects cannot be corrected.The company is composed of workers and has no real legal business purpose. It exists only for the convenience of the company (it only undertakes the superficial functions of paying social security and signing contracts, which is a legal personality). It has the name of a company but no independent personality under criminal law. Similarly, a company established by an individual to circumvent the law and commit crimes should not recognize its legal person status because it deviates from the legal purpose of the company’s establishment.
Article 2 of the “Interpretation of the Supreme People’s Court on Issues Concerning the Specific Application of Laws in the Trial of Unit Criminal Cases”:“Companies established by individuals for the purpose of carrying out illegal and criminal activities… shall not be punished as unit crimes.”Generally speaking, the establishment purpose of a company is legal. The legitimacy of the purpose means that the purpose of the establishment of the unit should comply with the requirements of the country, social public interests and public order and good customs, and cannot violate them.This is an essential element of corporate legitimacy.The legal personality of a company must meet the requirements for substantial establishment. If a defective company has problems such as shareholder defects, purpose defects, etc., its legal personality may be denied if the defects cannot be corrected.The company is composed of workers and has no real legal business purpose. It exists only for the convenience of the company (it only undertakes the superficial functions of paying social security and signing contracts, which is a legal personality). It has the name of a company but no independent personality under criminal law. Similarly, a company established by an individual to circumvent the law and commit crimes should not recognize its legal person status because it deviates from the legal purpose of the company’s establishment.
(3) Biquan Company has no substantial contribution to production and business activities
The reason why our country’s criminal law wants to protect the specific subject of companies is that companies play an irreplaceable role in production and business activities and can promote better development of production and business activities.The company’s property should meet the requirements of legal origin, independent ownership, and taxable declaration.,Unable to complete compliance tax return with virtual currency, thereforeUntaxed virtual currency is not company property.
According to Article 3 of the Company Law of the People’s Republic of China, as an enterprise legal person, a company has independent legal person property and enjoys legal person property rights.This property system needs to meet three core requirements: first, the source is legal and must be obtained through legal operations, shareholder capital contributions and other compliance channels; second, it must be independent and must be clearly distinguished from the personal property of shareholders and the property of other related parties; third, it must be included in accounting and must be included in the company’s financial books and subject to regulatory inspections.Legal company property must be verifiable. Tax records, financial audit reports, property rights certificates, etc. are all important evidence of its legitimacy.Property that is out of compliance with the financial accounting and supervision chain does not conform to the legal attributes of the company’s property.
If a company is engaged in an industry that is not legal, has not contributed to social production and life, and has not fulfilled corresponding tax obligations, and its employees are convicted of job embezzlement, the amount involved is xxxx million, but the company cannot have this money in the corresponding registration. Isn’t it absurd?
(4) Virtual currency is not property in the sense of criminal law
In the crime of official embezzlement, the property illegally obtained by the defendant has objectivity, reality and form requirements. In terms of objectivity,“Property” should exist independent of human will; in terms of reality, “property” already exists, rather than requiring a specific time or condition to be formed; in terms of physical form, “property” exists in a directly perceptible form.However, virtual currency cannot be perceived as data and has no value when possessed. It can only obtain value when it flows into the field of exchange. It obviously does not meet the above requirements. Referring to the arguments of Hu Yunteng, Zhou Jiahai, and Zhou Haiyang in the “Interpretation and Application of Several Issues Concerning the Application of Laws in Handling Criminal Cases of Theft”, illegal acquisition of virtual property cannot be used as financial means.Regarding the punishment of property crimes, first, virtual currency is virtual goods and virtual property. According to the current legal provisions and the principle of legality of crime and punishment, it cannot be determined to be “property” in the sense of criminal law. There are obvious differences between virtual property and tangible property such as money and property, and intangible property such as electricity and gas. Interpreting it as “public and private property” exceeds the authority of judicial interpretation.Virtual currency is not a physical object and cannot enter the real world. It lacks stability and has no practical utility. Its own characteristics cannot constitute property under criminal law according to existing laws.
4. Write at the end
The author believes that under the legal framework of our country, the currency circle company seeking protection from the judicial authorities by reporting the crime of job embezzlement is actually a challenge and mockery of the current law, and the disrespect for the law is apparent on the surface.Among the issuing units of the “Notice on Further Preventing and Dealing with the Risks of Speculation in Virtual Currency Transactions”, two high-ranking authorities and one department are among them. Judicial authorities have the obligation to find out whether the actual business activities of the company are illegal. Convicting people based solely on criminal composition does not meet legal expectations, and they must avoid being deceived and exploited by criminals with ulterior motives.
Paragraph 4 of Article 1 of the Interpretation of Several Issues Concerning the Application of Law in Handling Criminal Cases of Theft issued by the Supreme People’s Court and the Supreme People’s Procuratorate stipulates:“Those who steal drugs and other contraband shall be treated as the crime of theft and shall be given a lighter or heavier sentence according to the circumstances.”In practice, drug robbery and drug theft both constitute crimes. Some people may think that the illegality of the victim or the subject matter does not affect the establishment of the perpetrator’s crime. However, it must be clear that the crime of job embezzlement is a specific object crime, and the crime is directly directed at the company, and the illegal conduct of the company itself affects its legal personality. Therefore, it is not appropriate to discuss the two together.
Finally, from the author’s own experience, every cryptocurrency case has its own uniqueness and specificity. During the defense process, it is necessary to start from the details of the case, support the defense point of view through objective evidence on the case, highlight the effective arguments of technology, industry, and ecology in specific cases, and strengthen the cross-examination ability of new types of evidence such as electronic evidence, audit reports, blockchain tracking, and electronic data verification.
References to this article:
[Source: Ruan Shenyu.The property implications of blockchain digital assets[J].Journal of Renmin University of China,2023,37(02):144-156.】
[Source:http://dianda.cqvip.com/Qikan/Article/Detail?id=7201307758】
