China's Supreme People's Procuratorate published a landmark case on June 7 that could reshape how crypto crimes are handled across the country. A thief identified only by the surname Zhang was sentenced to 10 years and 9 months in prison and fined 100,000 yuan (about $13,800) for stealing 107 Bitcoin using the victim's wallet recovery phrase. The case is significant because the prosecution argued — and the court accepted — that Bitcoin qualifies as legally protected property under Chinese criminal law, due to its demonstrable economic value and exclusive control.
Inside the theft
Zhang got hold of the victim's recovery phrase, transferred 107 Bitcoin to his own wallet, and sold them. The stolen property was valued at 660,000 yuan (~$91,000) — the amount Zhang pocketed from the liquidation. The court treated that sum as the basis for the sentence, not the current market price of the Bitcoin at the time of the crime or of sentencing.
This isn't the first time a Chinese court has recognized crypto as legitimate property. In 2024, the Shanghai Second Intermediate People's Court ruled that crypto ownership is legal under Chinese law, describing Bitcoin as a 'unique and non-replicable' asset with clear financial attributes. But the Procuratorate's publication carries extra weight — it serves as guidance for lower courts across the country. The message is clear: Bitcoin theft should be prosecuted as property theft, valued at the market rate when the crime was committed.
A tricky regulatory backdrop
All of this happens while China maintains an outright ban on cryptocurrency transactions, enacted in September 2021 by ten regulators including the People's Bank of China. In May 2026, Beijing announced an expanded crackdown that now covers stablecoins, tokenized real-world assets, and offshore yuan-pegged digital currencies, with a two-year rectification deadline. So on paper, trading Bitcoin is illegal. But the latest prosecution guidance treats it as private property worth protecting.
What comes next
The case sets a precedent for similar theft and fraud cases across China's court system. Prosecutors now have a clear playbook: treat stolen crypto as property, use the liquidated value from the thief's pocket as the damage amount. That could mean swifter, harsher sentences for crypto-related crime — even as regulators keep squeezing the channels where people buy and sell those same assets. The tension between the ban on transactions and the protection of holdings is far from resolved.
