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Does bitcoin have property attributes? How to execute return delivery? Case reference book

Time : 14/07/2021 Author : 72rnkd Click : + -
        In order to promote the unification of the applicable law and give play to the exemplary role of excellent cases, the official wechat official account of the Shanghai Higher People's court has opened the column of "case reference book", which selects excellent cases such as reference cases of the Shanghai court, professionally interprets the difficulties of the applicable law, reads the judgment ideas in one picture, and provides reference for the trial of similar cases. As a virtual property, bitcoin has property attributes and is regulated by the legal norms of property rights. When bitcoin is returned and delivered, the court will implement the standard disposal of the right to request delivery of the reference object of the court, and judge whether the person subjected to execution has bitcoin available for execution. If the person subjected to execution has no bitcoin to implement, based on the consideration of public interest and the concept of good faith civilization, the two parties agree to make a discount compensation at the price agreed by both parties; If the negotiation fails, the applicant for enforcement may sue separately.
 
        Qian Zhengxiao, a master of law from Shanghai Normal University, is currently an assistant judge of the Executive Bureau of the Baoshan District People's Court of Shanghai. He was awarded by the Shanghai civil service system, and his case was awarded the annual excellent case analysis of the Supreme Court. The plaintiff, Mr. Cheng, sued the court and asked the defendant, Mr. Shi, to return a bitcoin to him. After trial, the court ordered the defendant Shi to return to a bitcoin in the lawsuit. After the judgment took effect, the person subjected to execution, Shi, applied to the court for execution because he failed to perform the effective legal documents. After acceptance, the court issued an execution notice to the person subjected to execution, ordering him to perform his judgment obligations and declare his property, but the person subjected to execution failed to perform.
 
        Through the existing network inspection and control system, the execution court failed to find that there was bitcoin available for execution under the name of the person being executed. Subsequently, the enforcement court, through traditional investigation and control, plans to issue an enforcement ruling and a notice of assistance in enforcement to its bitcoin account opening and trading platform, requiring the platform to assist in enforcement. However, the platform is registered overseas, so no valid communication address of the platform can be found. In addition, it was found that all bitcoin under the name of the person subjected to execution had been transferred to an outsider, and the outsider was missing. The person subjected to execution has reported the case to the public security organ and filed the case for investigation. The enforcement court informs the applicant of the situation. At this time, both parties expressed their willingness to negotiate. Based on the situation of the case, the court presided over the implementation of reconciliation between the two parties.
 
        On October 10, 2020, the plaintiff, Mr. Cheng, filed a lawsuit with the people's Court of Baoshan District, Shanghai, asking the defendant, Mr. Shi, to return a bitcoin to him. After trial, the court made a civil judgment on February 23, 2021: the defendant Shi returned to restore a bitcoin within 10 days from the date of this judgment. After the judgment came into effect, the person who applied for enforcement, Mr. Cheng, applied to the court for enforcement on May 7, 2021, asking the person who was executed, Mr. Shi, to return a bitcoin because he failed to perform the effective legal instrument. After accepting the case, the court issued an execution notice to the person subjected to execution on May 8, 2021, ordering him to perform his judgment obligations and declare his property, but the person subjected to execution failed to perform.
 
        On May 8, 2021, the enforcement court inquired about the property under the name of the person being enforced through the national court network enforcement inspection and control system (hereinafter referred to as the "network inspection and control system"), but failed to find the bitcoin under the name of the person being enforced. Subsequently, the enforcement court plans to issue an enforcement ruling and a notice of assistance in enforcement to the bitcoin trading platform where the person subjected to enforcement has opened an account, requesting the platform to assist in enforcement. The Executive Court did not find the effective mailing address and contact information of the platform in China. In addition, it was found that all bitcoin under the name of the person subjected to execution had been transferred to an outsider, and the outsider was missing. The person subjected to execution reported the case to the public security organ on August 27, 2020 and filed the case for investigation.
 
        The enforcement court informs the applicant of the situation. At the same time, both parties expressed their willingness to negotiate. In view of the intention of both parties to settle, the court will implement the comprehensive situation of the case and preside over the implementation of the settlement between both parties. The people's Court of Baoshan District, Shanghai organized the parties to implement the settlement on May 27, 2021. In the process of settlement, the applicant for enforcement recognizes that the person subjected to enforcement has no bitcoin to enforce. With the consent of both parties, the discount compensation is made, and an agreement is reached:. Second, after negotiation, both parties agreed that the person subjected to execution would compensate the person applying for execution at the purchase price of 84000 yuan when the person applying for execution lent it.
 
        The enforcement court held that the difficulties in the enforcement of this case lie in how to apply the legal rules in the bitcoin enforcement case, and how to return bitcoin to Cheng by Shi, and how to deal with it if it cannot be returned and delivered. The first instance held that bitcoin has the characteristics of value, scarcity and dominance, so it has the characteristics of the object of rights and meets the constitutive requirements of virtual property. We believe that in the process of enforcement, the court should implement the principle of giving consideration to trial and execution, take the legal recognition of bitcoin in civil judgments as the basis for the application of law, and carry out enforcement and disposal with reference to the legal norms of property rights. In addition, when the execution court intended to send a notice of assistance in execution to the bitcoin trading platform in this case, it found that the trading platform was an overseas company and did not have a valid communication address.
 
        At this time, traditional investigation is particularly important. After investigation, the person subjected to execution has transferred all bitcoin to the outsider, and the whereabouts of the outsider are unknown. The enforcement court informed the applicant for enforcement of the situation, and the applicant for enforcement recognized it. Accordingly, it can be presumed that the person subjected to execution has no bitcoin to enforce. According to the second paragraph of article 495 of the interpretation of the Supreme People's Court on application (hereinafter referred to as the judicial interpretation of the Civil Procedure Law), if property or tickets are damaged or lost during the period of holding by others, it shall be handled according to the provisions of article 494 of this interpretation, that is, the rules of the right to claim delivery of things. When applying this article, the court should consider whether the property is specific.
 
        We believe that the so-called specialization refers to irreplaceable, but bitcoin is not irreplaceable, so there are two implementation schemes: purchase and delivery, and discount compensation. Combined with China's current financial policy, it is inappropriate to prohibit the transaction and circulation of virtual currency, and the purchase and delivery are detrimental to the public interest. After consulting both parties, both parties expressed their willingness to make compensation at a discount, which is in line with the principle of party autonomy and ensures efficient and orderly implementation. As mentioned above, bitcoin is currently prohibited from trading and circulation, and there is no market reference price. The enforcement court can only organize the parties to negotiate the compensation for the discount, that is, without prejudice to the third party, the enforcement court guides and organizes the parties to negotiate the price of the subject matter independently.
 
        During the negotiation, the court should pay attention to the particularity of bitcoin as a virtual property, clarify the bargaining rules, and make special notification, such as the implementation risks and legal consequences, and the court's review of the legitimacy and rationality of the bargaining results. If the two parties fail to reach an agreement through negotiation, the applicant for enforcement may file a separate lawsuit. To sum up, after the execution, it was found that the person subjected to execution was unable to return bitcoin. After consulting the opinions of both parties, it was handled in the form of discount compensation. In the process of price reduction compensation, both parties negotiate and reach an implementation settlement after reaching an agreement. Since the object of the original judgment has been lost, both parties agreed to change it to monetary payment during the execution. If the person subjected to execution fails to perform the execution settlement agreement, the applicant for execution can sue separately.
 
        Bitcoin is an encrypted digital currency based on blockchain technology. Due to the lack of corresponding laws and regulations, the application of laws in bitcoin enforcement is vague, and the implementation results are different, which are the difficult problems in the implementation practice. Although bitcoin is called "coin", it is not a currency in the legal sense. Currency refers to the credit currency issued by the state as a means of legal repayment and bookkeeping. Bitcoin without national credit endorsement cannot become a widespread means of payment. In China, RMB is legal tender, which means that the creditor is not obliged to accept the payment made by the debtor in bitcoin without special agreement.
 
        Therefore, bitcoin is not legal and cannot become a real currency. There are many disputes about the legal recognition of bitcoin in academia, and the essence of these disputes is to find the recognition basis from the traditional civil rights theory. 2. Creditor's right theory, starting from the service contract relationship between network operators and network users, considers it as the right certificate for network users to claim creditor's rights;. The above theories are only analyzed from one aspect of bitcoin, which is not comprehensive. For example, according to the theory of real right, "thing" in the general theory of civil law refers to tangible things, excluding intangible things, and China follows the principle of legal property right, and bitcoin does not constitute the object of real right; Secondly, the object of debt is behavior. Bitcoin is obtained by miners' mining. Relying on the "decentralized" blockchain, there is no central cashing institution to accept bitcoin, so it is not a debt; Moreover, bitcoin is a large number of operations on a specific encryption algorithm through the computer, which is not an intellectual achievement; Finally, the new property theory needs the reconstruction of the concept of bitcoin, but it is not clear in legislation at present.
 
        The notice on preventing bitcoin risks (2013) issued by China's regulatory authorities mentioned that "by nature, bitcoin should be a specific virtual commodity", but virtual commodity is an economic term rather than a legal concept. For example, Mr. Wu and Shanghai Yaozhi Network Technology Co., Ltd., Zhejiang Taobao Network Co., Ltd. network infringement liability dispute case [(2019) zhe 0192 min Chu No. 1626], Mr. Li, Brandon • In the cases of smite v. Yan and other property damage compensation disputes [(2019) Hu 01 min Zhong No. 13689] and Chen v. Zhang's return dispute [(2020) Su 1183 min Chu No. 3825], the court held that bitcoin was generated through "mining", which requires the purchase and maintenance of relevant special machinery and equipment, and the payment of the consideration for power consumption.
 
        At the same time, it can generate economic benefits and has value; Secondly, the total amount of bitcoin is constantly 21million affected by the algorithm, which is scarce; Finally, bitcoin, the holder of bitcoin, takes possession, uses, gains and disposes of bitcoin, making it disposable and in line with the constitutive requirements of virtual property. Virtual property, also known as network virtual property. Although Article 127 of the civil code of the people's Republic of China clearly stipulates that it is protected by law, it does not make specific provisions on its concept and application. In judicial practice, the court does not directly judge the legal nature of virtual property with the attitude of judicial pragmatism. Because it has certain economic value and conforms to the property attribute, it is protected by the legal rules of property rights.
 
        In judicial practice, the return and delivery of the subject matter can be divided into the parties' self performance or court enforcement. The former need not be repeated. The latter is transferred to the applicant for enforcement after the party refuses to perform the effective judgment and the court "occupies" the subject matter through judicial force. In view of the particularity of bitcoin, it is necessary to analyze the problems encountered in its return and delivery. According to the China judicial documents network, there are only 6 Civil Enforcement judicial documents on bitcoin, including 4 cases in Beijing, 1 case in Jiangsu and 1 case in Guangdong. Among them, 4 cases in Beijing are the subject of enforcement, and the other 2 cases take bitcoin as the property of the person being enforced. From the perspective of documents, bitcoin implementation mainly faces two difficulties: on the one hand, how to obtain the relevant information of bitcoin, on the other hand, how to conduct judicial control over bitcoin.
 
        According to the memorandum signed by the Supreme People's court with the people's Bank of China and relevant ministries and commissions, the online inspection and control system has opened an online system. At present, it can query 16 categories and 25 items of information such as real estate, deposits, vehicles, etc. nationwide, but it cannot query virtual properties such as bitcoin. However, due to the unclear property clues in the traditional investigation, such as the bitcoin trading platform in this case is an overseas enterprise, which has no communication address in China, and the different judicial assistance policies, monetary supervision systems, and financial operation rules between countries, it is difficult for the enforcement court to make achievements in the investigation and evidence collection. How to judicially control bitcoin? Bitcoin is stored in the bitcoin wallet on the trading platform. The bitcoin wallet will generate countless wallet addresses, and each address can store or pay bitcoin.
 
        At the same time, the platform automatically generates corresponding secret key pairs, including a group of "private keys" and "public keys". Each bitcoin address corresponds to a "private key". If you want to use bitcoin in your wallet, you need to sign with the "private key", which is called data encryption. The "private key" is generated randomly, and the "public key" is obtained by a specific algorithm. The "public key" is encrypted to obtain the bitcoin address, and the process is one-way irreversible. The owner controls and disposes of bitcoin through "private key". It can be seen that "private key" is the key to judicial control of bitcoin. The "private key" can be stored in the network environment (such as a third-party trading platform) or in a non network environment (such as written on a notebook).
 
        But in fact, many uncertain factors, such as most of the trading platforms are overseas enterprises and have no business address in China, the whereabouts of the person subjected to execution are unknown, and the possession of a third party, make it impossible for the enforcement court to take effective judicial enforcement measures against bitcoin. In the enforcement of bitcoin, we should refer to the legal norms of property rights. In this case, the court ruled that the person subjected to execution should return bitcoin, which is manifested in the return of property. According to the first paragraph of article 495 of the judicial interpretation of the civil procedure law, if another person holds the property designated to be delivered by the legal document, the court ordered him to deliver it. If he refuses to deliver it, it can be enforced. At the same time, the second paragraph of this article stipulates that if the property is lost, it shall be handled with reference to the provisions of article 494 of this interpretation, that is, the legal norms of the right to claim delivery of the property.
 
        Therefore, there is no legal obstacle to the enforcement of bitcoin. When bitcoin is returned and delivered, the primary consideration is whether the person being enforced has bitcoin available for execution. The following describes the implementation and disposal plan adopted by the court in combination with the actual situation. If the person subjected to execution refuses to perform when returning and delivering bitcoin, the court shall take compulsory measures such as restricting consumption, including it in the list of dishonest persons, and imposing fines; If a crime is constituted, it shall be transferred to the public security organ for handling. It should be noted that if there is no evidence that the person subjected to execution has no bitcoin available for execution and fails to make an explanation that it cannot be returned within the specified time limit, it is presumed that the person subjected to execution refuses to perform. In this case, the person subjected to execution has transferred bitcoin to an outsider and cannot directly return it to the applicant for execution.
 
        At this time, the court can refer to Article 494 of the judicial interpretation of the civil procedure law to implement the disposal, and attention should be paid to the situation of property specialization. Although bitcoin is a virtual property with particularity, it is not irreplaceable. Its judgment standard is not absolutely unique, and it needs to be judged in combination with the specific circumstances of the case. Accordingly, with reference to the reply of the Executive Office of the Supreme People's Court on how to discount the specific things delivered by judgment after they are lost, the person subjected to execution can be ordered to purchase the same subject matter and make repayment. We think this method is inappropriate. "The law does not impose difficulties on others". Although China does not prohibit the holding of bitcoin, the notice on preventing the risk of bitcoin (2013), the notice on preventing the financing risk of token issuance (2017), the notice on preventing the speculation risk of virtual currency transactions (2021) and other documents clearly prohibit the related businesses of virtual currency in China.
 
        At the same time, based on the requirements of the concept of good faith civilization, the enforcement court should take reasonable and appropriate coercive measures that do not exceed the necessary limit. If the person being enforced is required to buy bitcoin to return it, it will damage the social and public interests and violate the concept of good faith civilization. Based on the principle of autonomy of will, after the subject matter is damaged or lost, it can be compensated at a discount with the consent of both parties. The implementation of settlement is the re disposition of the parties' civil rights. In this case, bitcoin is in the possession of a third party and cannot be returned. After negotiation, the return delivery is changed into monetary compensation payment, which is based on the consideration of the actual situation and should be respected. If the person subjected to execution fails to perform according to the execution settlement, the applicant for execution may file a separate lawsuit on this matter.
 
        Generally, objective valuation is adopted, which is based on the fair value of the subject matter, combined with the market price when the property is damaged, the price when the property is obtained and the compensation of both parties
 
        
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