China court treats Bitcoin as property in 107 BTC theft case

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China court treats <a href="https://pricpr.com/btc-usd/">Bitcoin</a> as property in 107 <a href="https://pricpr.com/btc-usd/">BTC</a> theft case

A man in China was sentenced to over ten years in prison for stealing 107 Bitcoin after memorizing someone’s wallet recovery phrase.

Summary

  • Zhang memorized 11 recovery words, reconstructed the last, and transferred 107 Bitcoin from Feng’s wallet.
  • Prosecutors treated Bitcoin as property because holders exercise control through private keys and recovery phrases.
  • Electronic records disproved Zhang’s “protective takeover” claim and confirmed 660,000 yuan in sale proceeds.

The situation started in July 2023 when Feng, who owned Bitcoin, asked a friend named Zhang for help converting 117 Bitcoin into cash. Zhang had successfully helped Feng with a similar transaction before, so Feng felt comfortable asking him to create a new digital wallet and manage the conversion.

Feng wrote down a 12-word phrase used to recover the digital wallet, with Zhang watching. According to prosecutors, Zhang remembered eleven of the words and the first letter of the twelfth. He then used this information to guess the missing word, take control of the wallet, and transfer 107 Bitcoin to accounts he owned.

Electronic evidence challenged the “protective takeover” claim

The next day, Feng discovered the Bitcoin was gone and immediately contacted a blockchain security firm before filing a police report. An investigation began in October 2023, and detectives used records of wallet activity, transaction details, and associated IP addresses to trace the transfers back to Zhang.

Zhang confessed to transferring the Bitcoin, but said he did it to secure the funds and stop someone else from stealing them. He also stated he lost money through investing and hadn’t withdrawn any profits. However, records of the transactions showed this wasn’t true. Investigators tracked the money through multiple digital wallets and discovered over 660,000 yuan—approximately $97,000—was sent to a friend’s bank account.

Prosecutors treat Bitcoin as property under criminal law

The prosecutor explained that while virtual currencies aren’t considered official money, they are still recognized as assets people can own.

Prosecutors in Licang District stated that Bitcoin has financial worth and gives owners complete control through unique security keys and recovery methods. They argued that these characteristics legally define Bitcoin as property, meaning it can be stolen like any other asset.

As a researcher on this case, I determined the stolen amount by using the actual cash received from selling the Bitcoin. Because China doesn’t have an official exchange rate for Bitcoin, this was the most accurate method. It also meant we didn’t have to assign a fluctuating market value to all 107 Bitcoin when deciding on Zhang’s sentence.

On April 28, 2025, Zhang was found guilty of theft by the Licang District People’s Court and sentenced to 10 years and nine months in prison, as well as a fine of 100,000 yuan. His appeal of this decision was denied by the Qingdao Intermediate People’s Court on November 10, 2025, and the original ruling was upheld.

This decision doesn’t change China’s existing rules about buying, selling, and using cryptocurrencies. Bitcoin isn’t considered official money there, and the government still considers many crypto-related businesses to be operating illegally.

As crypto.news reported earlier, China’s highest court announced in May that it was looking into creating clearer legal guidelines for handling disagreements involving virtual currencies. Chinese courts have already been considering Bitcoin as a type of digital property in cases related to theft, ownership, and getting assets back.

The recent court case in Qingdao highlights a growing trend: courts are upholding rights to cryptocurrency ownership even as regulators try to limit crypto trading. The case also demonstrates just how easily someone can gain complete access to a crypto wallet if they briefly see or learn a user’s recovery phrase.

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2026-06-08 14:44