Chinese Courts and Government at Odds Over Virtual Assets

Imagine a world where you’re told you can’t eat candy, but if someone steals your candy, they’d be prosecuted. Welcome to China’s complex relationship with cryptocurrencies. While Beijing slammed the door on crypto-related activities back in 2021, Chinese courts have been singing a different tune. They’ve effectively established that if you hold virtual assets, those assets are your legal property, protected by the law.

What the Courts Say: Property Rights Over Policy

A recent report titled “Identification of the Property Attributes of Virtual Currency and Disposal of Property Involved in the Case” makes it clear. Chinese courts recognize virtual assets like Bitcoin as property with economic attributes. This means that despite the national ban on cryptocurrencies, individual ownership of these digital assets should be legal and safeguarded under the current policy framework.

Crime and Punishment in the Digital Age

The report didn’t stop at just acknowledging the economic attributes of virtual assets. It also went ahead to offer recommendations for handling crimes involving such assets. The paper calls for a unified approach to criminal and civil law orders, stating that cases involving crypto should be treated separately to achieve a balance between personal property rights and broader social interests.

Crypto’s Rocky Road in China: A Timeline

• September 2022: A lawyer suggested that despite the ban, crypto holders in China are protected by law in cases of theft or breach of a loan agreement.
• May 2022: A Shanghai court affirmed that Bitcoin should be considered as virtual property and thus subject to property rights.

Key Takeaways for the Crypto World

• Legal Standing: Virtual assets now have standing in Chinese courts, even if they’re frowned upon by the state.
• Risk Mitigation: The government’s concerns over speculative trading and economic destabilization continue.
• Balanced Justice: Courts are seeking a middle ground, aiming for a balanced protection of individual property rights and public interests.

The court’s stance provides a glimmer of hope for the crypto faithful in China even if there are too many legal hurdles!