China’s court rules crypto can be traded despite digital currency ban
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 currency.
The recent ruling by The Beijing Number One Intermediate People’s Court upheld Chinese laws against virtual currencies, but at the same time found that Litecoin (LTC) is a virtual resource that does not meet the standards of currency.
The court further found that crypto-assets such as Litecoin can be considered the property of an individual, in much the same way that data can.
The court document says: “According to relevant administrative regulations and cases, our country only denies the monetary properties of virtual currency and prohibits its circulation as money, but virtual currency itself is a virtual property protected by law.”
A precious friendship
The ruling from 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 loaned Ding Hao the amount of Litecoin (LTC) in 2015. Ding promised to repay the amount over a set period of time, but failed to do so.
Ding had tried to use China’s strict rules as a defense against repayment, but the court was not inclined to favor that argument. After considering the evidence that the Beijing court found in favor of Zhai.
Now Ding faces a far deeper problem. According to the court, the outstanding sum to Zhai is 33,000 LTC. In 2015, the price of a Litecoin was somewhere between $1 and $4. If Ding had paid off the balance seven years ago, the value of the outstanding loan would have been $132,000.
Today, with LTC trading at $59.93 per coin, the dollar equivalent value of the outstanding loan is $1,977,690. That’s a lot not money in someone’s book.
Chinese law, explained?
Cryptocurrencies still subject to a ban in China. Crypto owners can therefore be grateful that a court in Beijing 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. It is more likely that the judiciary can use semantics to decide in an otherwise impossible set of regulations.
In any case, Chinese lawmakers and judges are proving adept at finding wiggle room in the nation’s difficult regulatory landscape.
China remains the leader in adoption
Cryptocurrency adoption remains strong in China. This despite the confusing, complex and sometimes downright unfriendly system.
According to data published by chain analytics firm Chainalysis, the nation remains in the top 10 markets for global crypto adopters, but just barely. China currently rounds out the top 10 at position number 10.
Number 1 nation in the world is Vietnam. Ukraine comes in at position 3, while Russia is one place above China at number 9.
The entire top ten is as follows:
- Vietnam
- The Philippines
- Ukraine
- India
- United States
- Pakistan
- Brazil
- Thailand
- Russia
- China
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