Can you steal bitcoins?

There is some discussion in the Bitcoin Cash community whether bitcoin itself (i.e. BCH) could qualify as money. Amaury Séchet clearly believes it does - in his famous speech announcing the Bitcoin Cash project, he even said it's the best money ever. On the other side of the debate, Vin Armani claims bitcoin is not money. Somewhere in between there is Tobias Ruck's position that improving bitcoin's intrinsic utility will improve its chance of becoming money - which we can probably all agree with.

One of Vin Armani's arguments is this:

[...] you can't own bitcoins.

If you can't make a valid ownership claim on an item (it can't be stolen), can that item be money?

But is it really true that bitcoin cannot be stolen?

The RuneScape case

In the Netherlands, a landmark legal judgement on theft of virtual items is known as "the Runescape judgement". In this case, victim and suspects all play the computer game RuneScape. While the 13-year-old victim is cycling home in September 2007, the suspects (also on bicycles) force him to go home with them. Once arrived, the victim is forced to transfer money and goods from his RuneScape account to an account of the suspects. He refused, prompting the suspects to physically assault him and make a death threat. The victim gives in and logs in to his account, after which suspects beat him again, and then transfer the virtual money and goods to themselves.

Police arrests the suspects next day. They are charged with violent theft, assault, and threat. The court indeed convicts them of violent theft. The main suspect appeals.

Court of appeal

In appeal, the defence presents the following arguments against conviction:

• The removed objects intangible and immaterial. The court of appeal rejects this, citing a 1921 Supreme Court ruling on electricity theft to show there is no requirement of materiality for a theft conviction - its economic value is considered more important.

• The removed objects have no economic value. The court of appeal rejects this too, citing earlier decisions that its value to the owner also counts here. The victim as well as both suspects all made statements indicating the objects have value and effort was put into creating them.

• The victim does not own the objects, but merely has a licence to use them. The appeals court rejects this argument as not only an owner but also a mere controller of an object is a victim of theft, when a thief takes over control. The verdict uses a comparison with passport theft: a passport is owned by the state but controlled by the holder, and can be stolen from the holder.

The court of appeal further points out:

• The removal of the virtual objects happened outside the scope of the rules of the virtual world, i.e. the removal happened outside of the game.

• Suspects did not just gain control of the objects, but the victim also lost control. This distinguishes theft from illegal copying of computer data.

As you might have guessed, the court of appeal also convicts the suspect. But the defence files a cassation appeal. On to Supreme Court!

Supreme Court

In Supreme Court, the defence makes three arguments:

• The removed objects are not real, they're just an illusory rendering of bits and bytes. Supreme Court disagrees, with the defence failing to demonstrate that the court of appeals made an unsound judgement on this aspect (considering valuation, creation through effort, or lost control).

• The law classifies the objects as data. Supreme Court rules that being data and being stealable need not be mutually exclusive.

• Taking in-game objects from other players is fair game. Supreme Court rejects this argument as the court of appeals correctly ruled the game rules do not account for the method used by suspects.

And thus the appeal to Supreme Court also fails. The end.

Implications for Bitcoin

So what are the likely implications for any bitcoin 'removal' in the Netherlands?

• Bitcoin obviously has value (the market price) and is created through effort (proof-of-work mining).

• Section 2 of the whitepaper indicates bitcoin can be owned. But even regardless of ownership, the holder of the private key clearly controls the bitcoin.

• Due to double-spending being prohibited, victims of bitcoin removal clearly lose control of their bitcoin.

• Bitcoin consensus rules do not account for transfer through illegally removed/copied private keys. One might even argue that the whitepaper describes bitcoin as a 'cash system', and removing someone's control of cash tends to violate the rules implied by a cash system. Without accounting for private key removal/copying, Section 6 of the whitepaper explicitly describes 'stealing' and 'play[ing] by the rules' as opposites.

• Whether bitcoin is classified as data is not relevant.

In other words, removing bitcoin through illegal acquisition of private keys is most certainly criminal theft, consistent with several rulings on theft of other virtual items after this landmark RuneScape case. Likewise, the public prosecutor can confiscate bitcoin similar to physical items.

However, I can invoke the fair-game criterion for my Grand Theft Read.Cash.

I am not a lawyer. This is not legal advice.