The Shanghai High People’s Court has ruled that bitcoin qualifies as a virtual asset protected by Chinese law despite China’s ban on cryptocurrency trading.
The Shanghai High People’s Court declared that Bitcoin has a “certain economic worth” and is a virtual asset protected by Chinese law, adding to the country’s tumultuous cryptocurrency scene.
The court stated that Bitcoin has some economic worth and possesses the relevant property features in a notification posted on the WeChat messaging app.
“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.”
The court further explained that bitcoin “has a certain economic value and conforms to the property’s attributes, the legal rules of property rights are applied for protection.”
The decision stems from a case filed in October 2020 by Cheng Mou with the Shanghai Baoshan District People’s Court, in which he demanded that one Shi Moumou restore his single Bitcoin.
However, the defendant failed to return the Bitcoin within the ten-day period specified by the court in a February 2021 order. Cheng decided to seek restitution through the Shanghai local court system, where the Baoshan Court mediated between the two parties.
The decision is significant given that China has banned cryptocurrencies like Bitcoin, alleging a threat to the country’s financial sector stability.
The court’s verdict is the first time the country’s legal system has ruled on Bitcoin. The high people’s court of China is notable for being the highest local court within provinces. It’s uncertain whether other higher courts will take a similar stance on Bitcoin.