China’s Supreme Court Rules Crypto Can Be Traded Despite Ban on Digital Currencies
A court in China has declared that bitcoin is a tradable asset so long as it is not used as cash.
The latest judgement by Beijing’s Number One Intermediate People’s Court maintained Chinese prohibitions barring virtual currencies, but concluded that Litecoin (LTC) does not fulfil currency criteria.
The court went on to determine that crypto assets like Litecoin may be deemed an individual’s property, just as data can.
The court document adds, “According to the relevant administrative rules and cases, our nation simply rejects the monetary properties of virtual currency and forbids its circulation as money, but virtual currency itself is a legally protected virtual property.”
In the case of two acquaintances, one of whom loaned the other 50,000 Litecoin, the Beijing court has rendered a verdict. In 2015, Zhai Wenjie revealed that he had loaned Litecoin (LTC) to Ding Hao. Ding failed to pay back the money within the specified time frame.
Ding sought to cite China’s stringent rules as a defence against repayment, but the court did not accept this line of reasoning. After reviewing the facts, the court in Beijing ruled in Zhai’s Favour.
Now, Ding is confronted with a far more serious dilemma. According to the court, Mr Zhai owes an overdue balance of 33,000 LTC. In 2015, the cost of one Litecoin ranged between $1 and $4. If Ding had paid the outstanding sum seven years ago, the value of the loan would have been $132,000 at that time.
At the current LTC price of $59.93 per coin, the monetary value of the outstanding loan is $1,977,680. That is a significant amount of non-money in anyone’s book.
In China, cryptocurrencies are subject to a prohibition. Therefore, cryptocurrency owners may be glad that a Beijing court has determined that cryptocurrencies do not fulfil China’s monetary requirements. Therefore, it is perfectly legal to possess and trade cryptocurrencies in China, and Chinese property law protects cryptocurrencies and their owners.