The Shanghai High People’s Court has recognized bitcoin as a virtual asset with economic value, despite China’s ban on trading cryptocurrencies.
The court’s statement is related to the case of Chinese citizen Cheng Mou, who filed a lawsuit in October 2020 demanding that the defendant Shi Moumou return one bitcoin to him. During the trial, in February 2021, the court granted the plaintiff’s claim, ordering the defendant to return bitcoin to him within 10 days after the decision. However, Moumou refused to return the funds, and Cheng Mou reopened the proceedings.
The Baoshan City People’s Court mediated between the two conflicting parties. Court decidedthat bitcoin is subject to virtual property rights laws because it has a certain value, is in short supply, and can be traded on the market.
Liu Yang, a lawyer at Beijing-based Deheng law firm, noted that the court’s statement will set a precedent in resolving other civil disputes in Shanghai related to cryptocurrencies. In 2018, the Chinese Court of Arbitration also ruled that bitcoin should be legally protected as property with economic value.
Given that cryptocurrency trading has been banned in China since 2017, it may be difficult to establish the current value of this bitcoin. Last year, the Chinese government stepped up pressure on the cryptocurrency industry by imposing a ban on mining cryptocurrencies, after which the miners were forced to move their equipment to other countries. Now, Chinese regulators have focused on preventing illegal activities using NFTs and the metaverse.
At the same time, China is leading the way in implementing its own digital currency. The digital yuan has already been tested in many Chinese cities, including the Beijing Winter Olympics.