Criminal Law Characterization of Virtual Currency in the Crime of Illegally Taking Deposits from the Public: Challenges and Solutions

Abstract

This paper explores the primary questions regarding whether virtual currency can be interpreted as “funds” in the crime of illegally taking deposit from the public. The analysis identifies a current dilemma of interpretation. An expansive interpretation would contravene the principle of legality and would result in creating a tendency toward overbroad offenses; while a strict adherence to the ordinary meaning would preclude the classification of the absorption of virtual currency as the illegal appropriation of funds, and thus would undermine the regulatory purpose of the statute. Thus, this paper provides for a typological analytical framework. First, payment and settlement–oriented virtual currencies, which possess quasi-monetary characteristics, can be recognized as “funds.” Second, although mainstream cryptocurrencies can be considered as a disguised form of deposit-taking through a functionalist interpretation. Third, value-deficient virtual currencies lack the nature of funds and should not be subsumed under this offense, instead, they may be regulated under other criminal charges. On this basis, and in light of two distinct behavioral patterns, the paper advances differentiated solutions. It argues that, while adhering to the principle of legality, a typologically restrictive approach should be employed to achieve greater precision in criminal law intervention, thereby providing a reference for criminal justice in the era of digital finance.