Shanghai court confirms legal recognition of crypto ownership
|- Personal ownership of cryptocurrencies is legal in China, but business crypto activities remain restricted per Shanghai court opinion.
- Cryptocurrencies are classified as virtual commodities with property-like attributes.
- Regulatory measures aim to balance personal rights with financial stability.
A Shanghai court has confirmed that owning digital assets, including Bitcoin, is legal under Chinese law. Judge Sun Jie of the Shanghai Songjiang People’s Court shared this opinion through the WeChat account of the Shanghai High People’s Court.
Judge Sun clarified that Chinese citizens are legally allowed to hold cryptocurrencies, but business entities are not. An enterprise cannot engage in cryptocurrency investment or token offering without regulation.
The interpretation came amid the court's review of a legal dispute between two companies over an initial coin offering (ICO), which under Chinese law is considered illegal fundraising.
China is worried cryptocurrencies might destabilize its financial system. Last year the nation banned ICOs or cryptocurrency exchanges. It stepped up its crackdown by outlawing Bitcoin mining and banning all business activities involving crypto in 2021.
China's stance on cryptocurrency ownership
Meanwhile, Beijing's position on digital assets changes as the world evolves with its own cryptocurrency trends. In his message, Judge Sun pointed out that cryptocurrencies are treated by Chinese law as a class of virtual commodities with property-like features, allowing individuals to own them as personal assets.
This view upholds China's aim to protect its financial systems from illicit computerized monetary exercises, particularly those connected with computerized money.
The complexity of cryptocurrency regulation in China was recently highlighted by developments involving Yao Qian, a former director of the People’s Bank of China’s digital currency research institute. According to local media, Qian has been removed from his position in the government after an investigation found that he accepted significant sums of crypto in return for political favors. The case underscores the tension and contradictions within the regulatory framework, in which Qian played a role.
Even with the recent clarification on ownership, industry insiders have known that individual possession of cryptocurrencies has been informally accepted. Under existing laws, Chinese courts have ruled that digital assets can qualify as property.
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