In a step toward regulatory clarity for Bitcoin holders in China, a Shanghai court has issued an opinion stating that personal ownership of digital assets is not illegal under Chinese law.
Personal Bitcoin Ownership Legal
The opinion, articulated by Sun Jie, a judge at the Shanghai Songjiang People’s Court, was published on the official WeChat account of the Shanghai High People’s Court.
Sun emphasized that while individuals are permitted to own cryptocurrencies, business entities in China are still prohibited from engaging in cryptocurrency investments or token issuance without regulatory approval.
This clarification was part of the court’s review of a lawsuit involving disputes between two companies over an initial coin offering (ICO), which is deemed illegal financing in China.
China has long viewed crypto assets as a potential threat to financial stability, leading to rigorous regulatory measures. In 2017, the government banned ICOs and closed crypto exchanges, and in 2021, it intensified its crackdown by banning Bitcoin mining and declaring crypto-related business activities illegal.
Despite this backdrop, Sun noted that cryptocurrencies are regarded as virtual commodities with property-like attributes, which are not prohibited for personal ownership.
“The laws and regulations maintain a high-pressure crackdown on speculative activities in cryptocurrency trading,” Sun stated, underscoring the government’s approach toward the industry.
This sentiment aligns with Beijing’s broader strategy to prevent “disruptions” to the economic and financial order, particularly in light of concerns about illegal activities facilitated by cryptocurrencies.
Regulatory Tensions In China
In a related incident, Yao Qian, a former director of the People’s Bank of China’s digital currency research institute, was implicated in a bribery case involving cryptocurrency, highlighting the complexities and contradictions within the Chinese regulatory landscape.
While the recent opinion provides clarity, it has been an open secret among industry insiders that individual cryptocurrency ownership has been tolerated. Certain courts have previously ruled that cryptocurrencies should be treated as property protected under existing legal frameworks.
However, there remains no indication that Beijing intends to relax its stringent regulations on the crypto industry, despite calls from experts for a more open market approach.
Zhu Guangyao, a former vice minister of finance, remarked in September that cryptocurrencies are “crucial” to the digital economy. He suggested that China must adapt to remain competitive as the US embraces the industry, especially with President-elect Donald Trump and his plans to use Bitcoin as a strategic reserve for the country in his upcoming administration.
At the time of writing, the largest cryptocurrency on the market has reached a new all-time high of $94,730. Bitcoin has risen 2.5% over the past 24 hours, after consolidating between $89,000 and $92,000 over the weekend and into Monday.
Featured image from DALL-E, chart from TradingView.com