Virtual Currency Extortion Leads to Three Years of Prison in China
Internationally, little has been done to establish laws around virtual currency. Just a week ago, however, a Chinese man in the Liaoning province was charged and sentenced for the extortion of virtual goods and currency within a local Internet café.
According to the Xinhua news agency, the man, along with three others, assaulted another man in the cafe, forcing him to give up various virtual goods and 100,000 yuan ($14,700) worth of the virtual currency known as QQ coins. The coins are the currency utilized by the major Chinese web portal, Tencent. It is used for the purchase of online goods and premium services for supported titles.
The sale of virtual currency within online games is a commonplace business within China. The QQ coins, like most other virtual currencies, cannot be converted back into real legal tender. Thus, the only way to turn a profit is through second-hand sale.
Based on reports from +8* | Plus Eight Star, more than 300 million people currently are playing online games in China today. The virtual goods market, as a whole, hovers around $2.8 billion, and Tencent alone accounts for approximately $1 billion of that total, with 90 percent of its revenue coming from virtual goods.
Despite the clear financial value, no law exists in China to protect virtual goods or currency. This case set a new precedent: The court ruled that the victim should be protected because he spent money on the extorted items. Under the ruling, the three men who assisted in the crime were fined. The primary defendant was sentenced to three years in prison.
This marks not only a significant precedent for Chinese law, but for the legal treatment of virtual goods worldwide.