A high court in China declares that Bitcoin is virtual asset proteced by Chinese law
The Shanghai High People’s Court has declared bitcoin to be a virtual asset protected by Chinese law despite the ban cryptocurrency trading in China.
A new ruiling from the court was made in relation to a lawsuit filed in October 2020 involving the recovery of a loan of 1 Bitcoin.
According to the Sina website, the case originally began at the Shanghai Baoshan District People’s Court on October 10, 2020, the district court heard a case filed by plaintiff Cheng, demanding defendant Shi to return the Bitcoin.
After the trial, the district court ruled on February. 23 that Shi must repay Cheng his BTC within 10 days of the judgment. However, the defendant refused to make payment and the case moved up to the Shanghai High People’s Court.
The Shanghai High People’s Court declared that bitcoin to be a virtual asset protected by Chinese law, and explained that bitcoin has a certain economic value and conform with the property’s attributes.
The district court subsequently arranged for intermediation between the two parties. After the negotiations, both parties agreed that the defendant Shi would make compensation at a discount from the value of the Bitcoin at the time of the loan.
The ruiling from the Shanghai High People’s Court could be significant as it sets a precedent for how virtual assets are being judged in Chinese law. So far, the government has discouraged the trading of cryptocurrencies, and shunned miners in order to reduce energy consumption.
In September 2021, the People’s Bank of China said in a statement that cryptocurrencies-related financial activities are illegal and could create an asset bubble that disrupt China’s financial stability.
Beijing regards cryptocurrencies as new a bubble that could disrupt China’s financial stability.