TL;DR
- People’s Court in China declares cryptocurrencies legally protected property that the authorities can’t confiscate.
- The decision boosts investors’ confidence in China’s crypto market and leads to more explicit regulations for trading crypto in the country.
The Authorities Can’t Seal Virtual Assets
In a verdict, an intermediate People’s Court challenges China’s reluctance towards cryptocurrencies. Moreover, it asserts that virtual assets must be recognized as legal property protected by China’s laws.
This decision indicates a significant turnaround compared to the previous regulatory landscape. Previously, authorities attempted to restrict cryptocurrency-related activities.
China’s history with cryptocurrencies featured bans and strict regulatory measures.
However, according to the court’s decision, authorities can no longer entirely seal virtual assets from owners. Consequently, this marks a noteworthy shift in the country’s approach to cryptocurrencies.
At some point, the PRC’s strategic embrace of crypto technology will catch US policymakers’ attention.
Chinese courts don’t create a legal framework around anything without the blessing of central authorities.
Faryar Shirzad, Chief Policy Officer @ Bitcoin and Crypto Exchange Coinbase
The report issued by the People’s Court proposed strategies for addressing crimes related to virtual assets. It emphasized the challenges of confiscating money and property in such cases, recommending a unified approach integrating criminal and civil law.
China’s Crypto Ban History
In 2017, China banned Initial Coin Offerings (ICOs), which restricted blockchain projects from generating funds. The closure of domestic cryptocurrency exchanges followed this move.
It eventually led to migrating Chinese traders and investors to offshore platforms.
The government’s stance continued to harden with time. To maintain its influence in the digital financial world, the Chinese central bank announced its plan to launch the digital Yuan as a new digital currency in 2019.
This was followed by the banning of crypto trading and mining by Chinese authorities in 2021.
These actions represented a cautious approach by Chinese authorities towards cryptocurrencies, driven by concerns about capital flight, financial stability, and potential illegal activities associated with digital assets.
Contrasting Stance of Chinese Courts and Government About Cryptocurrencies
The decision to recognize cryptocurrencies as legally protected property highlights the contrasting stance of Chinese courts regarding digital assets.
Susan Oh
Susan Oh is a leading figure in the integration of AI and blockchain for social good, serving as the CMO for BeOmni by Beyond Imagination and a civic technologist dedicated to creating scalable solutions. She is a board member of the Blockchain Commission For Sustainable Development supported by the UN GA Office of Partnerships, and a member of the Global Sustainability Network, a joint initiative by the Vatican and the Church of England to combat human trafficking. Recognized with the...
