Core Viewpoint - The establishment of a cooperative mechanism between Beijing's Public Security Bureau and Beijing Property Exchange aims to effectively manage and dispose of seized virtual currencies, addressing the challenges posed by the strict regulations on virtual currency transactions in China since 2021 [1][2]. Group 1: Innovative Disposal Solutions - On May 23, a special transaction involving over 7,000 virtual currencies related to illegal computer system control was successfully executed through a compliant trading platform in Hong Kong, with the proceeds being returned to China [2]. - The difficulty in disposing of seized virtual currencies stems from strict domestic regulations that prevent centralized trading, leading to a "seizure is easy, disposal is hard" dilemma for law enforcement [3]. - Various local practices have emerged to address disposal challenges, but they often carry risks and may conflict with regulatory policies [2][3]. Group 2: Development of the "Beijing Model" - In April 2024, the Public Security Bureau's Legal Affairs Division developed guidelines for the management of seized virtual currencies and began collaborating with the Beijing Property Exchange to create a "Beijing Model" for cross-border disposal [4]. - The model builds on previous successful collaborations between the Public Security Bureau and the Beijing Property Exchange, which has handled over 5 million seized items since 2017 [4]. - The framework for the "Beijing Model" includes detailed procedures for the transfer, sale, and repatriation of funds, ensuring compliance and security throughout the process [4]. Group 3: Successful Implementation and Future Directions - By December 2024, the "Beijing Model" was fully operational, allowing for the systematic disposal of seized virtual currencies through the Beijing Property Exchange and compliant trading platforms in Hong Kong [5][6]. - The successful disposal of seized virtual currencies on May 23 demonstrated the model's feasibility and provided a reference for other law enforcement units [7]. - Ongoing efforts are needed to refine the model and expand its applicability, with recommendations for a flexible regulatory framework to adapt to the rapid development of virtual currencies [8].

Core Viewpoint - The collaboration between Beijing Municipal Public Security Bureau and Beijing Property Exchange introduces a new mechanism for the disposal of virtual currencies involved in criminal cases, allowing for their conversion into cash through compliant overseas exchanges, thereby maximizing asset value [1][2]. Group 1: Innovative Disposal Mechanism - The new mechanism allows for the disposal of virtual currencies by incorporating them into the "physical submission" category, creating a compliant and fair judicial disposal model [1][2]. - This collaboration expands the existing framework established in 2017 for the physical submission of seized assets to include virtual currencies, addressing long-standing challenges in their disposal [2]. Group 2: Operational Process - The operational process involves the public security agency entrusting the disposal of virtual currencies to the Beijing Property Exchange, which then selects professional service providers to handle detection, receipt, and transfer, ultimately selling the assets through a compliant Hong Kong exchange [2][3]. - The process includes strict anti-money laundering checks to ensure compliance with national regulations and to facilitate judicial assistance in case of disputes [3]. Group 3: Pricing and Value Maximization - The pricing mechanism adheres to the Ministry of Finance's guidelines, setting a reserve price and conducting inquiries to ensure the best offer is accepted, thus maximizing the value of the seized assets [4]. Group 4: Safety and Efficiency - The disposal process is secured by requiring service providers to submit a performance bond of 110% and involves technical support from the Ministry of Public Security, with all steps recorded for risk management [5]. - The new model significantly enhances efficiency, compressing the entire process of detection, inquiry, trading, and currency conversion into a 24-hour timeframe, thereby accelerating the disposal of virtual currencies [5].