China's Courts Recognize Legal Status of Virtual Assets, Offer Contrasting Stance on Cryptocurrencies
Summary:
China's People's Courts assert their independent judicial power, trying various cases including those related to virtual assets. A report acknowledges virtual assets as legal property protected by law, despite the blanket ban on foreign digital assets in China. The report proposes separate treatment of virtual asset crimes for balanced protection of personal property rights. Chinese courts have exhibited differing stances on Bitcoin and virtual assets, with some recognizing their property rights. China's hostile stance on cryptocurrencies has softened in recent years, as seen in the resurgence of Bitcoin mining and Chinese exchanges.
China's People's Courts have the authority to exercise judicial power independently without interference from administrative or public organizations. These courts handle various types of cases, including criminal, civil, administrative, and those involving economic disputes. According to a local daily, a report titled "Identification of the Property Attributes of Virtual Currency and Disposal of Property Involved in the Case" has recognized that virtual assets possess economic attributes and should be classified as property. Despite China's blanket ban on foreign digital assets, the report argues that individuals' virtual assets should be considered legal and protected by law within the existing policy framework. The report also offers suggestions for dealing with virtual asset-related crimes and proposes separate treatment of cases to ensure a balanced protection of personal property rights and broader societal interests. China has imposed a strict ban on all crypto-related activities and prohibited foreign crypto exchanges from serving mainland customers. However, Chinese courts have exhibited differing stances on Bitcoin and other virtual assets in contrast to the national policy. These differing perspectives have emerged since September 2022, with lawyers asserting that the law provides protection for crypto holders in cases of theft, misappropriation, or breach of a loan agreement, despite the ban. Moreover, a Shanghai court ruled in May 2022 that Bitcoin qualifies as virtual property, thus granting it property rights. While China has maintained a hostile position towards Bitcoin and cryptocurrencies, the government appears to have softened its stance in recent years, as reflected in the resurgence of Bitcoin mining activity and the rise of Chinese exchanges within the global market.
Published At
9/1/2023 11:22:55 AM
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