Many in the cryptocurrency world will remember the dramatic story as it unfolded in 2018, when Synth, the enigmatic figurehead of the Skycoin Project, claimed that he and his wife had been forcibly restrained, and even beaten, in his home by disgruntled contractors who had been caught falsifying invoices. This same team extracted 18.88 Bitcoin from the Skycoin leader along with thousands of Skycoin under threat of violence. The contractors began dumping their stolen coins onto the market, adversely affecting Skycoin’s price at the time.
As news about this alleged home invasion began to circulate, many in the crypto community were skeptical that any of the described events actually took place. Many mistook the episode for an exit scam or a smokescreen for internal theft of coins, or some other nefarious conspiracy. This may be where most people lost track of the story, and of Skycoin.
The perpetrators of the crime were each sent to prison to serve sentences from several months to over a year, depending on the role they played in the attack. They were convicted of “illegal detention”, for holding Synth and his wife hostage while they compelled them to surrender cryptocurrency, but in spite of the conviction, Skycoin’s funds were not ever recovered. The perpetrators emerged from their prison sentences facing a civil lawsuit in an effort from Synth to recover Skycoin’s stolen funds.
This most recent case was technically an appeal, brought by the four criminal defendants who had been ordered to return the stolen money in the original proceedings which resulted in their prison sentences. A second lawsuit was launched to recover the funds, and was appealed by the defendants to the First Intermediate People’s Court on the tenuous assertion that digital currency cannot be considered property in China and therefore cannot be returned to an “owner”.
Now, nearly two years later, the saga has come to its conclusion in a court ruling at the Shanghai First Intermediate People’s Court, where Skycoin’s founder, Synth, emerged victorious.
At the centre of the lawsuit was the thieves’ dubious assertion that Chinese law that did not recognize Bitcoin (or other digital currency) as property, and therefore not subject to the rights of fiat currency, or any other tangible form of value. They argued, therefore, that they should not be compelled to return the stolen Skycoin or Bitcoin because those could not be legally considered ‘property’.
Needless to say, this argument was soundly refuted in court, with the judge ruling that digital currency like Skycoin or Bitcoin, despite being virtual property, nevertheless possess the characteristics of ‘property’ as legally understood, including value, scarcity, and fungibility.
In fact, the court’s ruling is a landmark judgment for cryptocurrency holders across China, whose investments are now subject to the same legal protection as any other form of property.
In a gesture of good faith, Synth waived his rights to the stolen Skycoin so the thieves now must return only the 18.88 Bitcoin they forcibly stole in the summer of 2018.
Skycoin, meanwhile has made tremendous progress in the years since the theft, which did not affect development in any way. In addition to an affordable and secure hardware cryptocurrency wallet released six months ago, April 2020 saw the long-awaited release of the Mainnet for Skywire, the private and encrypted network that can be deployed anywhere to form secure mesh networks that obviate the need for Internet Service Providers.
Further details on the case can be found on Baidu (Chinese language link), Shine, Bitcoin.com and CoinTelegraph. (Note that both stories use pseudonyms for the key players, including the pseudonym “Pete” when referring to Synth.)
Learn about the many projects under active development by Skycoin at Skycoin.com