Chinese Court Rules Cryptocurrency Is Not Protected by Law Citing Lack of Legal Status
A Chinese high court has issued a public statement affirming that trading or investing in cryptocurrency is not protected by law, citing crypto assets’ lack of legal status in China.
Chinese Court States Crypto Not Protected by Law
The high court in China’s northern Shandong province issued a public statement Sunday clarifying that cryptocurrency is not protected by law, the South China Morning Post reported Monday. According to the statement:
Investing or trading cryptocurrency isn’t protected by law.
The court came to this conclusion after reviewing a case where the plaintiff invested 70,000 yuan ($10,799) in crypto tokens endorsed by his friends in 2017. However, the accounts were closed in 2018 after China’s central bank, the People’s Bank of China (PBOC), reiterated its ban on financial institutions from dealing with cryptocurrency transactions.
In January, an intermediate court in Jinan, Shandong’s capital city, ruled that the plaintiff’s fraud allegation was not tenable because crypto assets did not have any legal status in China. The plaintiff subsequently appealed but, in March, the court upheld its ruling.
This ruling contradicts some previous decisions by several other Chinese courts. For example, the Shanghai No.1 Intermediate People’s Court ruled that bitcoin was a digital asset protected by law in May last year. A month prior, the Shenzhen Futian District People’s Court in Guangdong Province declared ethereum legal property with economic value.
Meanwhile, China has been increasing its efforts in cracking down on crypto activities, including closing mining farms. Last week, the Shenzhen branch of PBOC reportedly shut down 11 companies engaged in crypto activities.
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Published at Mon, 23 Aug 2021 21:30:47 +0000