An event of paramount importance has taken place; a Chinese People’s Court recently published an innovative report that deepens the legality of cryptocurrencies within the country. The report claims that existing Chinese law legally recognizes virtual assets as property and assures their protection.
Regardless of Beijing’s strict 2021 prohibition on virtual assets, the courts of China have been gradually recognizing the property rights of the owners the virtual assets.
It is of paramount importance to highlight that no administrative or public entities influence courts ‘decisions in China. Therefore, China´s Courts are autonomous and conduct their judicial proceedings independently.
These courts preside over a wide range of cases, including criminal, civil, administrative, and economic disputes.
Landmark Report Highlights Legal Protection of Cryptocurrencies
In essence, the report focuses on identifying the ownership attributes of virtual currency and the proper procedures for handling cases involving said assets. It explicitly recognizes the economic attributes of virtual assets and ultimately classifies them as legal property protected by Chinese law.
Apart from recognizing virtual assets as legal property, the report provides handy pieces of advice about what to do on crime related to these assets. The report recommends harmonizing criminal and civil law and handling them as separate issues.
This approach aims to strike a harmonious balance between safeguarding personal property rights and defending the broader interests of society.
China has executed strict regulatory procedures regarding cryptocurrencies and digital assets. The country had taken a tough stance, banning altogether all activities related to cryptocurrency. In the same vein, it also banned foreign crypto exchanges from serving clients from the inland.
This recognition is particularly noteworthy considering China’s previous stance on foreign digital assets. The country had imposed a total ban on all foreign digital assets, effectively labeling them illegal.
China’s History with Cryptocurrencies
For many years Chinese courts have been reluctant to accept digital assets. September 2022 was the year this started to change; a legal expert suggested that Chinese cryptocurrency holders should be legally protected when facing theft, misappropriation, or breach of loan agreements, despite the blanket ban on cryptocurrencies.
Significantly, later in May 2022, a Shanghai court officially recognized Bitcoin as virtual property. This decision is a remarkable event for the crypto world in China.
No longer after having virtual assets and cryptocurrencies banned by Chinese authorities, the mining bitcoins almost disappeared in China. After a year, it came back resurfaced after a year and ended up achieving second place worldwide.
By Leonardo Pérez
