A recent judgment from China’s Shanghai High People’s Court has given the country’s experiment with cryptocurrency a fresh twist. While China’s expulsion of crypto miners and other judgments had effectively restricted crypto trading and associated operations within its borders, the Shanghai ruling may provide some relief to the community.
The judgment in question found Bitcoin to be a virtual asset with economic value that is protected by Chinese law. “The People’s Court has established a unanimous view on the legal position of bitcoin in actual trial practice and designated it as a virtual property,” it wrote on its official WeChat channel.
In China, the highest municipal court is the high people’s court, which is preceded by the people’s courts and intermediate people’s courts.
They are directly controlled by the central government and have a structure that is identical to that of the Supreme People’s Court, which sits above them. In China, the Supreme People’s Court is the highest court.
China and Bitcoin
The High People’s Court was considering a lawsuit brought by Cheng Mou, another Shi Moumou, who was seeking the restoration of his (one) bitcoin. On October 10, 2020, Cheng Mou filed the complaint at Shanghai’s Baoshan District People’s Court, and Moumou was ordered to refund the bitcoin.
The defendant, however, declined to do so, and the case was sent to the Shanghai High People’s Court. While the case is still pending in China’s lower courts, the decision might be significant since it establishes a precedent for how virtual assets are viewed under Chinese law.
To date, the government has discouraged cryptocurrency trading and shunned miners in an effort to minimize energy use and discourage the entire business.
“Virtual currency-related business activities are illegal financial activities,” the People’s Bank of China said in September last year. It also warned Chinese citizens that crypto trading could “seriously endanger the safety of people’s assets.”
According to Liu Yang, a lawyer from Beijing’s Deheng Law Firm, the high court’s declaration would serve as a reference judgment for civil issues concerning bitcoin in the Shanghai area.