China's Crypto Paradox: Courts Contradict Beijing's Ban
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In 2021, while Beijing strictly prohibited cryptocurrencies, numerous Chinese courts have continually recognized the property rights of virtual asset holders.
A recent report from a People’s Court in China delves into the legal standing of virtual assets. Although China enforces a comprehensive ban on foreign digital currencies, this report defends the notion that individual-held virtual assets are legal and shielded by law within the prevailing policy framework.
Exercising their judicial independence, the People’s Courts of China have consistently dealt with a myriad of cases, from criminal and civil to economic disputes, free from external administrative interference.
The document, titled “Identification of the Property Attributes of Virtual Currency and Disposal of Property Involved in the Case”, highlights that virtual assets inherently possess economic traits. Hence, they qualify as property. Suggestions to handle crimes linked to virtual assets were also presented, emphasizing the need for unified criminal and civil laws in addressing these issues. This approach aims to harmonize personal property rights with public interests.
Though China's overarching policy rejects digital assets, and foreign crypto exchanges are barred from catering to mainland clients, the nation's judicial perspective on Bitcoin and similar digital assets appears more accommodating. Notably, in September 2022, legal discourse proposed that crypto owners in China remain protected by the law in events of theft or breaches. By May 2022, a Shanghai court validated Bitcoin's status as virtual property, reinforcing its protected rights.
Over time, despite its initial rigorous opposition to cryptocurrencies, the Chinese government's stance seems to be mellowing. Indicators of this shift include the resurgence of China’s share in Bitcoin mining. After plummeting to zero post-ban, it rebounded, securing the second position within just a year.
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