Bitcoin Deemed ‘Virtual Property’ By Chinese Court
The Hangzhou Internet Court, litigating a lawsuit dating to 2013 between a cryptocurrency exchange and one of its clients, ruled this week that bitcoin is considered legal property under Chinese law.
While the court ruled that the client’s lawsuit against the cryptocurrency exchange was insufficient, the court deemed bitcoin to be property under the specifics of the case — a landmark distinction for the Bitcoin industry in China.
“Bitcoin holds the attributes as property — valuable, scarce and disposable. We should recognize it as a virtual property,” Dovey Wan, a founding partner at Primitive Capital, wrote, translating from local reporting. She continued to say that “[a]ccording to ‘The General Civil Law,’ virtual property is legally protected by laws of People’s Republic of China.”
Wan heralded the ruling as “a major milestone” that means “Bitcoin is actually legal in China.” A court in Shenzhen made a similar ruling in October 2018, wherein the court deemed that bitcoin “deserves protection by law as property.”
Bitcoin in China: A Complicated Relationship
Still, bitcoin (and crypto in general) isn’t out of the woods in China just yet. The court victory underscores the complicated and often misunderstood relationship that the Chinese government has with the wider cryptocurrency industry.
For instance, cryptocurrency trading is still banned in China, even though its citizens are legally allowed to own bitcoin and altcoins.
“[To] be clear here,” Wan added on Twitter, “holding Bitcoin as a private property [being] legal does not mean ‘trading Bitcoin in a systematic way’ is legal, yet. So don’t equate this as crypto exchange is legal in China there is still [a] long way to go. One step a time.”
Regardless of crypto’s trading legality in the country, one blockchain professional, Cao Yin, told the Global Times that the ruling sends “a clear signal that the financial authorities are starting to loosen control over digital currency and virtual currency.”
Even so, “Bitcoin is virtual property, but it’s not fiat money,” one representative for the People’s Bank of China (PBC) told the outlet.For its own part, the PBC is working on its own cryptocurrency, which it began in 2017. It is pending approval from the Chinese State Council.