A Chinese People’s Court issued a report on the legality of virtual assets, stating they remain legal property protected by law under the current legal policy framework.
The People’s Courts of the People’s Republic of China exercise independent judicial authority and are not subject to administrative or public organization interference. In addition to criminal, civil, and administrative cases, these tribunals also hear economic disputes.
According to a local newspaper, the report titled “Identification of the Property Attributes of Virtual Currency and Disposal of Property Involved in the Case” acknowledged that virtual assets have economic attributes and can be classified as property.
Although China has deemed all foreign digital assets illegal by imposing a blanket prohibition, the report argues that under the current policy framework, virtual assets held by individuals should be considered legal and protected by law.
The report also included recommendations for dealing with crimes involving virtual assets, noting that since the money and property cannot be seized, the solution should be based on unifying criminal and civil law.
Such cases should be handled separately to accomplish a balanced protection of personal property rights and social and public interests.
China imposed a blanket prohibition on all crypto-related activities and prohibited foreign crypto exchanges from serving mainland customers. Nevertheless, despite a hostile national policy towards digital assets, Chinese courts have taken a divergent posture towards Bitcoin and other digital currencies.
In September 2022, a lawyer suggested that despite the prohibition on cryptocurrencies, crypto holders in China are protected by the law in case of theft, misappropriation, or breach of a loan agreement. In May 2022, a court in Shanghai ruled that Bitcoin qualifies as virtual property and is, therefore, subject to property rights.
China’s opposition to Bitcoin and other cryptocurrencies dates back many years. However, the government has softened its position in recent years. This was demonstrated by China’s Bitcoin mining share rising from zero to second place within a year after a blanket prohibition.
