A landmark ruling reinforces crypto’s property status but upholds bans on commercial use in China.
Crypto Deemed Property By Shanghai Court
The Shanghai High Court has ruled that cryptocurrencies possess “property attributes” under Chinese law, affirming their recognition as virtual commodities. However, the ruling emphasizes the strict prohibition of commercial crypto activities, such as token issuance and speculative trading, as part of China’s efforts to maintain financial stability.
Legal Dispute Over Token Issuance
The ruling stemmed from a case where an agricultural development company sued an investment firm over an unfulfilled blockchain agreement. The court declared the contract invalid, ordering partial restitution due to both parties’ involvement in an illegal financial activity—token issuance.
Key Takeaways on Crypto’s Legal Status
Cryptocurrencies can be held as personal assets but cannot be used for business purposes. Contracts involving unlicensed crypto activities are deemed invalid, limiting legal recourse. The decision serves as a warning about strict compliance with financial regulations in China.
Implications for Crypto in China
China’s dual approach—recognizing crypto as property while banning related business activities—aims to curb financial instability and prevent illicit activities. The case highlights the legal risks of navigating the crypto landscape in the country without authorization.
Crypto’s Restricted Path in China
While acknowledging crypto’s property status, the Shanghai court reinforces China’s “high-pressure” stance against its commercial use, signaling a clear boundary for entities operating within its legal framework.
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