Bitcoin as Virtual Asset in China: Protected by Chinese Law

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China has recently banned financial institutions and payment companies from providing services to cryptocurrency transactions. Saying that financial institutions, including banks, and online payments channels, must not offer clients any service involving cryptocurrency activities. 

Crypto-related activities in China have now received little tolerance in the country. Cryptocurrency in China is protected by Chinese law which is considered as a virtual asset declared by Shanghai High People’s Court. In Spite of the ban on virtual assets, the Chinese government has declared the cryptocurrency’s economic value. 

A notice posted by the Court on its official Wechat channel last week states: “In the actual trial practice, the People’s Court has formed a unified opinion on the legal position of bitcoin, and identified it as a virtual property.”

Hence, the Court further confirmed virtual assets’ economic value and property attributes. and protects them by the legal rules of property rights in the country. First time in China the higher court has issued a ruling concerning bitcoin cases, the statement marks. 

The Civil Dispute involving Bitcoin

Mr.Cheng Mou filed a lawsuit with the Shanghai Baoshan District People’s Court on Oct. 10, 2020, claiming that Mr. Shi Moumou has to return one Bitcoin to him. After the trial, the court ruled on Feb 23, 2021, and declared that Shi must repay Cheng his BTC within the duration of ten days from the date of judgment. 

Chi further refused to accept the court’s judgment by refusing to pay the bitcoin, hence the court arranged intermediation between these two parties for a convincing settlement between the two. The Beijing Deheng’s Law Firm’s Lawyer, Liu Yang to local media says that the High Court’s statement carries strong significance as a reference to civil disputes involving bitcoin in the Shanghai region.