Chinese Court Takes Step Toward Recognizing Bitcoin and Cryptocurrency as Legal Property
A new ruling issued by an arbitration body in China states that cryptocurrencies are legally protected property. The ruling, passed by the Shenzhen Court of International Arbitration confirms that Bitcoin is protected by law.
An unnamed plaintiff in a dispute settled in Shenzhen argued that the defendant, tasked with managing the plaintiff’s crypto portfolio, failed to return Bitcoin (BTC), Bitcoin Cash (BCH) and Bitcoin Diamond (BCD) as agreed under contract.
The defendant’s case rested on the central bank’s stance on the illegality of issuing tokens through Initial Coin Offerings, which was passed in September 2017. According to the central bank,
“Tokens or ‘virtual currency’ used in token financing are not issued by monetary authorities, do not have monetary attributes such as legal and mandatory, do not have legal status equivalent to currency, and cannot and should not be circulated as money in the market. use.”
But the arbitrator upheld the contractual obligation between the two parties as legally binding, citing the defendant’s fiduciary obligation to return the plaintiff’s cryptocurrencies.
“There is no law or regulation that explicitly prohibits parties from holding Bitcoin or private transactions in Bitcoin.”
“The contract in this case stipulates the obligation to return the Bitcoin between two natural persons, and does not belong to the (September 2017 ban).”
“Bitcoin has the nature of a property, which can be owned and controlled by parties, and is able to provide economic values and benefits.”
The ruling also awarded interest payments to the plaintiff along with the return of the assets, totaling an estimated $493,158.40, in addition to a penalty of 100,000 yuan ($14,400).