China’s top prosecutors have put a spotlight on a legal paradox: Bitcoin is treated as protected property in criminal cases even as the state bans crypto activity. On June 7 the Supreme People’s Procuratorate (SPP) published a landmark Qingdao case — headlined “107 Bitcoins Disappeared” — that crystallizes that tension.
What happened
- A defendant identified only by the surname Zhang used a victim’s wallet recovery phrase to transfer and sell 107 BTC.
- Qingdao prosecutors successfully charged Zhang with theft under Chinese criminal law.
- Zhang was sentenced to 10 years and 9 months in prison and fined 100,000 yuan (about $13,800).
- The court valued the stolen assets based on the 660,000 yuan (roughly $91,000) Zhang received when liquidating the coins.
Why the ruling matters
The prosecution won by arguing Bitcoin meets China’s legal definition of “property”: it has demonstrable economic value and can be exclusively controlled by its owner. By publishing the case on the SPP’s official website, China’s highest prosecutorial body is signaling that this is a model approach for prosecutors nationwide. Cases featured on the SPP platform are intended as guidance for lower courts and prosecutors across China’s 34 provincial-level jurisdictions — so this is effectively an instruction to treat stolen crypto as theft and to value it at market rates.
The legal contradiction
The ruling sits uneasily beside Beijing’s longstanding anti-crypto policy. In September 2021, ten regulatory bodies including the People’s Bank of China declared all cryptocurrency transactions illegal, effectively banning trading, exchanges and mining. In May 2026 the crackdown widened to explicitly target stablecoins, tokenized real-world assets, and offshore yuan-pegged digital currencies, with a two-year rectification deadline for unauthorized cross-border channels.
Yet Chinese courts have repeatedly affirmed Bitcoin’s status as protectable property. A 2024 Shanghai ruling described crypto ownership as lawful, with the Shanghai Second Intermediate People’s Court calling Bitcoin a “unique and non-replicable” asset with clear financial attributes. The SPP’s publication of the Qingdao judgment lifts that principle to a national prosecutorial guideline.
Implications
The result is a novel legal architecture: citizens are barred from buying, selling or trading Bitcoin, but if someone steals it, the criminal system will protect the victim’s property rights. For the global crypto industry, the case is more than a domestic curiosity — it shows that even a tightly restrictive regime is recognizing, in practice, the economic reality of crypto assets. Practically, victims in China may now have clearer legal recourse for theft, while holders and service providers must still navigate a regulatory environment that forbids legitimate transactions.
Cover image: Grok; BTCUSD chart: TradingView.
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