China Court Rules Crypto Can Be Traded Despite Digital Currency Ban

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A court in Chi­na has ruled that cryp­to is an asset that can be trad­ed between indi­vid­u­als as long as the asset is not used as a currency.

The recent rul­ing by The Bei­jing Num­ber One Inter­me­di­ate People’s Court upheld Chi­nese laws against vir­tu­al cur­ren­cies, but simul­ta­ne­ous­ly found that Lite­coin (LTC) is a vir­tu­al asset that fails to meet the stan­dards of currency.

The court went on to find that cryp­to assets such as Lite­coin can be con­sid­ered the prop­er­ty of an indi­vid­ual, much in the same way as data can.

The court doc­u­ment states: “Accord­ing to the rel­e­vant admin­is­tra­tive reg­u­la­tions and cas­es, our coun­try only denies the mon­e­tary attrib­ut­es of vir­tu­al cur­ren­cy and pro­hibits its cir­cu­la­tion as mon­ey, but vir­tu­al cur­ren­cy itself is a vir­tu­al prop­er­ty pro­tect­ed by law.”

A costly friendship

The rul­ing of the Bei­jing court comes in the case of two friends, one of whom had lent the oth­er 50,000 Lite­coin. Zhai Wen­jie stat­ed that he had lent Ding Hao the sum of Lite­coin (LTC) in 2015. Ding promised to pay back the sum over a set peri­od, but failed to do so.

Ding had attempt­ed to use China’s strict reg­u­la­tions as a defense against repay­ment, but the court was not inclined to favor that line of argu­ment. Hav­ing con­sid­ered the evi­dence the court in Bei­jing found in favor of Zhai. 

Now Ding faces a far deep­er prob­lem. Accord­ing to the court, the out­stand­ing sum due to Mr Zhai is 33,000 LTC. In 2015 the price of a Lite­coin was some­where between $1 and $4. If Ding had paid the remain­ing bal­ance sev­en years ago, the val­ue of the out­stand­ing loan would have been $132,000. 

Today, with LTC trad­ing at $59.93 a coin, the dol­lar equiv­a­lent val­ue of the out­stand­ing loan is $1,977,690. That’s a lot of not mon­ey in anyone’s book.

Chinese law, explained?

Cryp­tocur­ren­cies remain sub­ject to a ban in Chi­na. Cryp­to own­ers may there­fore be thank­ful that a Bei­jing court has found that cryp­tocur­ren­cies do not meet the stan­dard of cur­ren­cy in Chi­na. There­fore, it is quite legal to own and trade cryp­tocur­ren­cies in Chi­na, and for cryp­tocur­ren­cy and its own­ers, to be pro­tect­ed by Chi­nese prop­er­ty law.

Con­fused?

When explained in Eng­lish, the con­tra­dic­to­ry nature of these state­ments – all true – seem to make very lit­tle sense. Some clar­i­ty may be lost in trans­la­tion. More like­ly, the judi­cia­ry may be employ­ing seman­tics to make rul­ings in an oth­er­wise impos­si­ble reg­u­la­to­ry framework. 

In any case, Chi­nese law­mak­ers and judges are prov­ing to be adept at find­ing wig­gle room in the nation’s dif­fi­cult reg­u­la­to­ry land­scape

China remains a leader in adoption

Cryp­tocur­ren­cy adop­tion remains strong in Chi­na. This despite the con­fus­ing, com­plex and at times down­right unfriend­ly system.

Accord­ing to data pub­lished by on-chain analy­sis firm Chainal­y­sis, the nation remains in the top 10 mar­kets of glob­al cryp­to adopters, but only just. Chi­na cur­rent­ly rounds out the top 10 in posi­tion num­ber 10.

The num­ber 1 nation in the world is Viet­nam. Ukraine comes in at posi­tion 3, while Rus­sia sits one place above Chi­na at num­ber 9.

The full top ten is as follows:

  1. Viet­nam
  2. Philip­pines
  3. Ukraine
  4. India
  5. Unit­ed States
  6. Pak­istan
  7. Brazil
  8. Thai­land
  9. Rus­sia
  10. Chi­na

Disclaimer

All the infor­ma­tion con­tained on our web­site is pub­lished in good faith and for gen­er­al infor­ma­tion pur­pos­es only. Any action the read­er takes upon the infor­ma­tion found on our web­site is strict­ly at their own risk.

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