- The report affirms that existing Chinese law legally recognizes virtual assets as property.
- This recognition is particularly noteworthy considering China’s prior stance on foreign digital assets.
In a significant development, a People’s Court in China has released a groundbreaking report that delves into the legality of virtual assets within the nation. The report affirms that existing Chinese law legally recognizes virtual assets as property and provides them with protection.
Despite the stringent ban on cryptocurrencies imposed by Beijing in 2021, Chinese courts have been gradually recognizing the property rights of virtual asset holders.
The People’s Courts in the People’s Republic of China exercise judicial autonomy and operate independently. The court operates free from external influence from administrative or public entities.
These courts preside over a wide range of cases, including criminal, civil, administrative, and economic disputes.
Landmark report highlights legal protection for crypto
At its core, the report focuses on identifying the property attributes of virtual currency and the appropriate procedures for handling cases involving these assets. It explicitly acknowledges the economic attributes of virtual assets, ultimately classifying them as legal property protected by Chinese law.
In addition to recognizing virtual assets as legal property, the report offers valuable suggestions on how to address crimes related to these assets. The report recommends aligning criminal and civil law, thus treating these cases separately.
This approach aims to achieve a harmonious balance between safeguarding personal property rights and upholding the broader interests of society.
China has implemented stringent regulatory measures in its journey with cryptocurrencies and digital assets. The country had taken a firm stance, imposing a blanket ban on all crypto-related activities. It also prohibited foreign crypto exchanges from serving mainland customers.
This recognition is particularly noteworthy considering China’s prior stance on foreign digital assets. The country had imposed a comprehensive ban on all foreign digital assets, effectively labeling them as illegal.
China’s history with crypto
Chinese courts have exhibited a nuanced perspective on digital assets over the years. This shift commenced in September 2022 when a legal expert proposed that Chinese crypto holders should receive legal protection in situations involving theft, misappropriation, or breaches of loan agreements, despite the overarching crypto ban.
Subsequently, in May 2022, a Shanghai court went a step further by officially recognizing Bitcoin [BTC] as virtual property.
China’s historically hostile stance toward Bitcoin and cryptocurrencies has undergone gradual transformation. A tangible indicator of this shift was observed in the realm of Bitcoin mining.
After the blanket ban was imposed, China’s Bitcoin mining activity seemingly vanished. However, it resurged within a year, eventually securing the second spot globally.