Innovative Partnership Against Virtual Currency Crimes
In a bid to combat the rising trend of crimes involving virtual currencies, the Beijing Municipal Public Security Bureau has laid the groundwork for a groundbreaking partnership with the Beijing Property Rights Exchange, commonly referred to as the “North Exchange.” This collaboration aims to tackle one of the pressing challenges faced by law enforcement: the inability to effectively manage and dispose of virtual assets within China.
Cooperation Framework Agreement
This initiative has materialized in the form of a joint Cooperation Framework Agreement for the Disposal of Virtual Currency Involved in Cases. The agreement categorizes these digital currencies as “physical handover” items, thus allowing for a more structured process for their disposal.
Addressing the Challenges
As the frequency of virtual currency-related offenses has surged, the need for a reliable mechanism for handling such cases has become increasingly important. One major issue has been the difficulty in directly liquidating these digital assets domestically, compounded by the risks associated with cross-border transactions. In response, the partnership with the North Exchange is set to broaden the avenues for their disposal.
Comprehensive Approach to Asset Disposal
The framework involves a comprehensive approach that examines the relevant policies and procedures necessary for managing these digital assets. It establishes a new strategy for overseas disposal, whereby law enforcement agencies can consign the physical versions of seized virtual currencies to the North Exchange. Upon receipt, the North Exchange selects a licensed organization to oversee activities like detection, receipt, and transfer of these currencies. Ultimately, they facilitate their sale via a legally compliant exchange based in Hong Kong.
Ensuring Proper Allocation of Proceeds
Upon completion of the necessary foreign exchange management procedures, the derived funds are directed to a dedicated account associated with the public security authorities, ensuring that the proceeds are appropriately allocated to the national treasury.
Successful Implementation
This innovative model has already been put to the test, successfully implemented in a case managed by the Shunyi Public Security Sub-Bureau, marking a significant advancement in the legal handling of virtual assets in Beijing.
