China’s First Digital Wallet Key Theft Case: Harsh Sentences Issued

• China’s first prosecution for illegally acquiring digital wallet keys sets a legal precedent.
• Xuhui District introduces guidelines for handling virtual currency in criminal cases.
• Guangqi X Space aims to tackle cybercrimes, focusing on AI, blockchain, and digital assets.

The Xuhui District Procuratorate has announced China’s first case involving the illegal acquisition of digital wallet private keys, marking a significant step in the legal handling of virtual currency crimes.

During the establishment ceremony of Guangqi X Space, an initiative dedicated to combating and punishing new types of cybercrimes, the Xuhui District Procuratorate, in collaboration with the Xuhui District Public Security Bureau, introduced guidelines for the standardization of virtual currency disposal in criminal litigation.

The first case of illegally acquiring digital wallet private keys in China involved three individuals, including a man identified as Liu. These criminals conspired to implant a backdoor in an application package containing a virtual currency wallet, allowing them to obtain 27,622 mnemonics and 10,203 private keys illegally.

Using this data, they were able to obtain 19,487 digital wallet addresses, posing a threat to the security of virtual currencies. Following a public prosecution filed by the Xuhui District Procuratorate, Liu and his accomplices were sentenced to three years in prison and fined 30,000 yuan each by the Xuhui District Court.

According to Song Shanshan, head of the Xuhui District Procuratorate’s cyber prosecution team, criminal cases involving virtual currencies have steadily increased in the past three years. These crimes often involve complex and specialized methods, with a clear trend toward organized crime syndicates. The amounts involved in these cases are substantial, frequently reaching hundreds of millions of yuan.

The Guangqi X Space, initiated by the Intelligent Procuratorial Research Center of the Shanghai Procuratorate and managed by the Xuhui District Procuratorate, will serve as a comprehensive base for prosecuting cybercrimes. The initiative is set to focus on research and the development of legal frameworks in new fields such as artificial intelligence, blockchain, and digital assets.