Recently China’s controversial cryptocurrency landscape has taken a new turn after a Shanghai High People’s Court ruled that Bitcoin as an asset has ‘specific economic value’ and is a virtual asset protected by the country’s laws.
In a court statement released via a messaging platform WeChat, it is considered that Bitcoin has some economic value and related asset characteristics.
The ruling comes in the wake of China banning cryptocurrencies such as bitcoin while citing threats to the country’s economic stability.
“In the actual trial practice, the People’s Court formed a unanimous opinion on the legal status of bitcoin and thus further recognized it as virtual property.”
The Judge further said that Bitcoin has a specific financial value and, according to the characteristics of the property, the provisions of the Property Rights Act for protection apply to it too.
The court ruling is the first judgment in the country’s legal system involving Bitcoin. In particular, the Supreme People’s Court of China is the highest local court in the province. However, it is not clear whether other high courts will take a similar stance on Bitcoin.
Liu Yang, a lawyer from Beijing while commenting on the verdict said the court ruling would serve as a key indicator for civil disputes over bitcoin in the Shanghai area.
While considering the verdict in the case declaring that Bitcoin should have legal protection, now it will be interesting to see how crypto players and the government respond and act to the new order.
The verdict in the October 2020 case where a man identified as Cheng Mau has filed a lawsuit in the Shanghai Baoshan District People’s Court seeking the return of his bitcoin.
While the defendant failed to return the bitcoin within the stipulated ten days as indicated by the court back in the February 2021 judgment.
As of now, Cheng has decided to move further and seek relief from the local court system in Shanghai, where the Baoshan Court conducted arbitration between the two parties.
Despite China’s long-standing opposition to cryptocurrencies, last year’s proposal to outlaw cryptocurrency trading and mining was seen as important in the wake of the market crash.
While this proposal led to a major cryptocurrency correction, with miners moving to various other friendly jurisdictions. In particular, at that time, China had the highest number of bitcoin miners worldwide.
The government continues to argue that cryptocurrencies are disrupting the economy and preventing personal risks from spreading to the wider community.
After that, the government continuously released regulations to close any loopholes. The recent one is the banning of short videos related to crypto that are shared online. The China Netcasting Services Association (CNSA) has upheld the sharing of videos promoting digital assets and updated its terms.