The Chinese Court has officially recognized the legality of Bitcoin and cryptocurrency ownership

The High Court of China has reaffirmed its stringent prohibitions on token fundraising and business transactions, while also recognizing cryptocurrencies as commodities with limited legal applications.

The High Court of China has reaffirmed its position on cryptocurrencies, recognizing their “property attributes” in accordance with Chinese law. This implies that crypto assets are commodities, but they are not recognized as currency or business instruments. The court underscored that the method of raising funds through token issuance or circulation remains unlawful, despite the fact that this recognition provides limited legal protections.

A misconduct dispute between two businesses regarding a failure token launch precipitated the ruling. The court denounced their actions, describing them as illicit public financing. This reaffirmation underscores the stringent regulatory environment in China, which prohibits any organization or individual from participating in unauthorized token issuance or fundraising activities.

In spite of this resolute posture, the court’s recognition of cryptocurrency as a commodity implies that it may have legal implications. This perspective is consistent with China’s selective endorsement of blockchain technology, particularly in the context of trade facilitation and cross-border remittances. China emphasized the potential of blockchain in international commerce at the most recent BRICS Summit, even employing cryptocurrencies for transactions with Russia. Furthermore, many global trade initiatives have incorporated the digital yuan, which is China’s CBDC.

The country’s position in the swiftly evolving digital asset space has been the subject of global discussions as a result of China’s strict crypto policies. China continues to restrict the use of broader cryptocurrency, despite the recent approval of its first Bitcoin ETF in Hong Kong, which provides mainland investors with indirect exposure to Bitcoin. In the interim, the United States and other nations have contemplated the use of Bitcoin as a strategy to mitigate China’s economic influence.

The High Court’s decision is indicative of China’s cautious stance toward cryptocurrency. The court reiterated its apprehensions regarding the risks associated with token launches and business transactions involving cryptocurrencies, despite acknowledging its value as a commodity. It cautioned that Bitcoin and comparable assets could potentially disrupt financial systems and facilitate illicit activities, thereby bolstering the nation’s well-established anti-crypto stance.

Despite the fact that prominent figures such as Justin Sun, the founder of Tron, advocate for the increased adoption of blockchain technology in China, there are few indications of substantial policy changes. Currently, China is concentrating on the regulation of cryptocurrency usage, permitting its use only in specific circumstances, while simultaneously exercising strict control over the broader industry.

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