In a landmark development for cryptocurrency users in China, the Haidian District Court in Beijing has officially accepted a civil lawsuit involving the theft of Bitcoin. This marks one of the first known instances in which a Chinese court has recognized digital assets like Bitcoin as legitimate subjects of civil rights, potentially setting a precedent for future blockchain-related legal disputes.
The case centers around Mr. Shi, a user of the cryptocurrency platform Bibei Network (Beibeiwang), who is seeking over 410,000 RMB in damages after losing more than 40 Bitcoin from his account. The incident, which occurred in May 2016, highlights growing concerns about digital asset security and the legal responsibilities of crypto platforms.
The Incident: How the Bitcoin Was Stolen
According to court documents, Mr. Shi began trading Bitcoin on multiple platforms—including Bibei Network, Huobi, and Yuanbao—in February 2015. In May 2016, he used Bibei Network’s wealth management service to earn interest on his holdings.
On May 7, 2016, an unauthorized user redeemed over 40 Bitcoin from Mr. Shi’s Bibei account and transferred them via a "red envelope" feature to a newly registered account. These funds were then withdrawn to a private wallet. More alarmingly, the same attacker allegedly moved an additional 99.5 Bitcoin from Mr. Shi’s Huobi and Yuanbao accounts into the Bibei platform and withdrew them—all within hours.
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Notably, Mr. Shi received a notification that 99.5 Bitcoin had been transferred into his Bibei account from external platforms. Shortly afterward, those incoming funds were combined with his existing balance of 40.35 Bitcoin and sent out in bulk through the red envelope function—a mechanism typically used for gifting or sharing crypto among users.
Legal Implications: Digital Assets as Civil Rights Objects
What makes this case particularly significant is its timing and legal context. In June 2025, during the 21st session of the Standing Committee of the 12th National People's Congress, lawmakers reviewed the draft of the General Provisions of the Civil Code, which included provisions recognizing network virtual property and data information as formal civil rights objects.
This legislative shift implies that digital currencies like Bitcoin, game tokens, and personal data are no longer treated merely as intangible internet phenomena but as legally protected assets. As such, users may now pursue legal remedies when their digital holdings are compromised due to platform negligence.
Mr. Shi argues that Bibei Network, as a paid service provider, had a contractual obligation to safeguard user assets. By failing to detect suspicious transactions or issue alerts during the theft, the platform allegedly breached its duty of care.
Platform Response: Security Questions Raised
Bibei Network responded to the allegations by raising several red flags about the circumstances surrounding the breach:
- Both the login password and fund transfer password were compromised.
- Mr. Shi reportedly used identical credentials across multiple platforms.
- None of his accounts had two-factor authentication (2FA) enabled—such as Google Authenticator or SMS/email verification—despite handling large sums.
- Funds from other platforms were smoothly transferred into Bibei without triggering security checks, which the company claims suggests possible insider access or negligence on the user’s part.
The company emphasized that while it takes security seriously, user responsibility plays a critical role in protecting digital assets. It also pointed out that investigations are ongoing and questioned whether the incident was truly a "theft" or involved other factors.
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Why This Case Matters for Crypto Users
This lawsuit underscores several key issues in the evolving world of digital finance:
- Legal Recognition: For years, regulators in China have maintained a cautious stance toward cryptocurrencies. However, treating stolen Bitcoin as compensable property signals a move toward formal acknowledgment of crypto ownership rights—even if not full regulatory approval.
- Platform Accountability: Exchanges and crypto services may now face greater liability if they fail to implement robust security measures or monitor abnormal activity.
- User Responsibility: While platforms must protect infrastructure, users also bear responsibility for securing their accounts through strong passwords and multi-factor authentication.
- Cross-Platform Vulnerabilities: The fact that funds were moved across multiple exchanges suggests systemic risks in interoperability and identity verification across platforms.
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Frequently Asked Questions (FAQ)
Q: Can you sue for stolen Bitcoin in China?
A: Yes—this case demonstrates that Chinese courts may accept civil lawsuits involving cryptocurrency theft, especially as digital assets gain recognition under civil law frameworks.
Q: Are cryptocurrencies legally protected in China?
A: While trading and issuance of cryptocurrencies are restricted, recent legal drafts acknowledge virtual property rights, meaning digital assets like Bitcoin may be protected under civil law even without full regulatory endorsement.
Q: Who is liable when crypto is stolen—from the exchange or the user?
A: Liability depends on the circumstances. If an exchange fails to provide adequate security or monitoring, it may be held accountable. However, users who neglect basic protections like 2FA may share responsibility.
Q: What is a “red envelope” in crypto platforms?
A: Inspired by Chinese tradition, some platforms allow users to send cryptocurrency as digital red envelopes—often used for promotions or peer-to-peer gifting. Misuse of this feature can pose security risks if not properly monitored.
Q: How can I protect my digital assets from theft?
A: Use unique passwords, enable two-factor authentication, store large amounts in cold wallets, and monitor account activity regularly.
Q: Could this case influence future crypto regulations in China?
A: Potentially. Judicial recognition of crypto as property may encourage clearer legal standards for custody, inheritance, and dispute resolution in the digital asset space.
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Conclusion
The Haidian Court’s decision to hear this case represents a pivotal moment in China’s approach to digital assets. By treating Bitcoin as a recoverable form of property, the judiciary is inching toward a more nuanced understanding of blockchain technology and its role in modern finance.
While regulatory uncertainty remains, this case affirms that users have avenues for legal recourse when their digital wealth is compromised. At the same time, it serves as a stark reminder: in the decentralized world of cryptocurrency, security is a shared responsibility between platforms and individuals alike.
As virtual property gains legal footing globally, cases like this will shape how courts, regulators, and users navigate the complex intersection of technology, law, and financial rights.