New Guidelines for Managing Virtual Currency in Judicial Proceedings
In a recent development reported by the official WeChat account of the Shanghai High People’s Court, authorities have established new guidelines aimed at managing fluctuations in virtual currency values related to criminal judicial proceedings across Shanghai. The Baoshan District People’s Court has actively put these guidelines into action, collaborating closely with the Shanghai Public Security Bureau to effectively manage over 90,000 FIL coins utilizing a sophisticated method termed “domestic entrustment, overseas disposal, closed-loop return.”
Challenges and Framework Development
With the rising prevalence of virtual currencies posing unique challenges to the legal system, the courts in Shanghai undertook extensive research into existing policies and operational strategies. These efforts culminated in the creation of an organized framework that emphasizes compliance and cooperation among various stakeholders. This enhanced mechanism allows the courts to assign responsibility for the involved virtual assets to a certified third-party institution, which then facilitates their disposal.
Transaction Methodology
The agreed-upon method includes securing performance guarantees from the third-party institution and coordinating an overseas sale through a qualified agent on a licensed trading platform regulated by the Hong Kong Securities and Futures Commission. Importantly, this transaction must occur at a value not less than the average market price for the preceding 20 days.
Final Steps and Asset Allocation
Following the successful completion of these transactions, the necessary approvals from national foreign exchange authorities are acquired, enabling the proceeds to be transferred into a dedicated court account. Ultimately, any confiscated assets will either be allocated to the national treasury or returned to victims, effectively rounding out the cycle of “domestic entrustment, overseas disposal, closed-loop return.”
