Chinese Civil Court Rules Bitcoin as Legally Protected Property

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The Court Of International Arbitration in China (a high Chinese court), involving half a million worth of cryptocurrency, led to an unprecedented event in which Bitcoin and other cryptocurrencies were deemed as valuable personal property and therefore protected under Chinese law. The court also noted that there is no law currently prohibiting the possession of cryptocurrency.

The plaintiff who originally brought the suit against the defendant, who he had hired as a steward to trade his cryptocurrency for him, had scheduled a deadline to return the coins. The defendant had missed this deadline, thus keeping the coins in his possession. The cryptocurrency held in question are 20 Bitcoins, 70 Bitcoin Cash, and just over 12.5 Bitcoin Diamond.

The defenses argument was that the contract between the two was invalid due to the Chinese ruling to ban ICOs and crypto trading. According to the defendant’s stance, this would make all crypto transactions illegal and therefore the contract was outside legal bounds of the courtrooms enforcement. However, the court strongly disagreed with the defendant’s interpretation where, according to a Chinese news source, the final conclusion was drawn:

“The Bitcoin contract between the plaintiff and defendant does not violate mandatory legal provisions and regulatory affects which may be considered invalid. Under Chinese law, cryptocurrency is a digital asset and does not prevent it from becoming an object of delivery.”

As a result of this ruling, the defendant was forced to pay 100,000 Yuan in damages on top of returning the coins back to its rightful owner.

An Important Crypto Precedent

Cryptocurrency continues to be a grey area around the world, especially in China, where rumors of Bitcoin bans have repeatedly brought turbulence to the cryptocurrency marketplace. Despite being legal, there has been numerous incidences where the government had to take action against its operations as it was being improperly regulated. These instances have often had global implications.

As a result of this court proceeding, one can speculate that the case for cryptocurrency is far from settled. ICO’s and exchanges have been shut down and even banned. Many exchanges like Binance have found ways to adapt, thus moving their operations to Malta, which seems to bring hope to Chinese crypto enthusiasts. At the time of this ruling, which can later be challenged by an even higher court, private individuals are free to utilize Bitcoin amongst themselves.

The Chinese government is not completely opposed to cryptocurrency. Those of us within the cryptocurrency space realize that central banks as well as private banks do what they can to impede the progress of digital currency. However, within the law, these institutions are not all powerful. Citizens of China can still hold cryptocurrency and therefore hope that over time they will be able to legally participate in activities such as trading and ICO investment opportunities.

Author: Cryptobonx

Cryptobonx is a Crypto –Currency and Blockchain Enthusiast.He is a believer of transforming complex information into simple, actionable content.

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