A Shanghai court clarifies the legal status of cryptocurrency ownership in China.
People can lawfully own digital currencies like Bitcoin, according to a Shanghai court that clarified the legal position of cryptocurrency ownership in China. Judge Sun Jie of the Songjiang District People’s Court gave this comment, which clarifies the intricate legal environment around cryptocurrencies in the nation.
Judge Sun clarified in a recent post that cryptocurrencies are categorized as virtual commodities that have property features, even though they are not regarded as official currency. This discrepancy prevents Chinese companies from investing in or issuing tokens without an official license, while individuals are free to acquire and retain cryptocurrencies.
The judge’s investigation of a commercial dispute from 2017 included her opinion. An agricultural company paid an investment firm to prepare a cryptocurrency white paper, but the firm failed to produce any token. The court declared the agreement unlawful, compelling the investment firm to repay a portion of the payment.
Even though the Chinese government has put severe restrictions on cryptocurrency activities—such as closing exchanges in 2017 and tightening laws even further in 2021—it is still lawful to acquire bitcoin assets. However, Judge Sun pointed out that speculative cryptocurrency trading could cause economic instability and make illicit acts like fraud and money laundering easier.
This most recent decision joins an expanding corpus of judicial precedent that views cryptocurrencies as property, albeit with stringent limitations on their commercial use. Although corporations face more obstacles, individuals in China enjoy some legal protection for their cryptocurrency holdings despite the government’s strict control over the industry.This legal issue underscores the continuous conflict between China’s ambition to dominate financial markets and the worldwide emergence of decentralized assets as the market for digital currencies keeps expanding.
