Chinese Man Faces Three Year Sentence For Virtual Currency Extortion

The debate about whether or not virtual property has any real value may be one step closer to having a legal resolution. Over the weekend a judge in China's northeastern Liaoning province sentenced a man to three years in prison for extorting virtual goods and currency from a man who used the same Internet cafe, as reported by PC World. The man beat up the victim and forced him to turn over $14,700 in Tencent's QQ Coins virtual currency as well as numerous virtual items for use in online games. Three friends who assisted in the extortion scheme as well as the main attacker were also fined.

It's worth noting that QQ Coins cannot be converted back into cash once purchased, so there would be no traditional argument that the victim lost items of value as a result of the extortion. Likewise, there are no formal legal protections for virtual property in China. In this ruling, the court argued that the victim had been unlawfully deprived of the money and time used to obtain the QQ Coins that were taken from him. While not exactly a legal precedent, this suggests that future attempts to take a user's virtual property by real-world force could be punished with similar fines and jail terms.

The case also underscores the sheer popularity of Tencent's virtual currency and goods. The company generated $342.3 million in revenues for Q1 '09 and almost $1 billion in revenue in 2008, purely through sales of its virtual items. There's been talk of Facebook and MySpace needing to move to emulate the Tencent virtual goods model and Facebook's new emphasis on virtual currency and payments may well indicate a move in that direction. This case simply begs the question of what is going to happen, legally, when virtual items on Facebook or other sites are in such high demand that people are willing to mug others in order to get them. 

Join us for Digital Kids Conference – April 25-26, 2012 in Los Angeles