Despite a blanket ban on cryptocurrencies imposed by Beijing in 2021, many Chinese courts over the years have established that virtual asset holders have property rights.
People’s courts in China exercise judicial power independently and are not subject to interference by an administrative or public organization. These courts try criminal, civil, administrative, and cases that involve economic disputes.
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 thus can be classified as property, reported a local daily. Although China has deemed all foreign digital assets illegal by imposing a blanket ban, the report argued that virtual assets held by individuals should be considered legal and protected by law under the current policy framework.
The report also added suggestions to deal with crimes involving virtual assets and noted that since the money and property involved in the case cannot be confiscated, it should be based on the unification of criminal and civil law order. Such cases should be treated separately to achieve balanced protection of personal property rights and social and public interests.
China imposed a blanket ban on all crypto-related activities and banned foreign crypto exchanges from offering their services to mainland customers. However, despite a hostile national policy on virtual assets, the Chinese courts have offered a contrasting stance on Bitcoin and other virtual assets over the years.
The first instance of such difference arose in September 2022, when a lawyer suggested that crypto holders in China are protected by the law in case of theft, misappropriation or breach of a loan agreement despite the ban on crypto. Later in May 2022, a Shanghai court affirmed that Bitcoin qualifies as virtual property and thus is subject to property rights.
China’s hostile stance against Bitcoin and other cryptocurrencies has been a long-drawn one. However, over the past few years, the government seems to have softened its stance. This was evident from the rise in Bitcoin mining share of China which dropped to zero post blanked ban but rose to take the second spot within a year. Similarly, Binance
A People’s Court in China published a report on the legality of virtual assets analyzing the criminal law attributes of these digital assets. The court in its report noted that virtual assets under the current legal policy framework are still legal property and protected by law.