September 6, 2023
By Anjali Kochhar
In a groundbreaking judgment, the Shanghai High People’s Court has officially classified Bitcoin as virtual property protected by Chinese law. This decision is a significant development in the legal status of cryptocurrencies in China.
The ruling came as part of a case involving a Bitcoin loan agreement filed in 2020. Cheng Mou had sued Shi Moumou in the Shanghai Baoshan District People’s Court, seeking the repayment of 1 Bitcoin.
Initially, the district court ruled in favour of Cheng Mou, stating that Moumou should repay the Bitcoin loan. When the defendant failed to comply, the case was escalated to the high court for mediation in 2021. The high court’s decision was groundbreaking:
“In the actual trial practice, the People’s Court has formed a unified opinion on the legal position of Bitcoin and identified it as virtual property. Bitcoin has a certain economic value and conforms to the attributes of property, and therefore, legal rules for property rights should apply for its protection.”
However, due to the current ban on Bitcoin trading in China and the absence of a reference price, the high court ruled that the parties should negotiate a discounted compensation.
This landmark ruling is the first of its kind in China and sets a precedent for future civil disputes involving Bitcoin in the Shanghai region. It marks a significant step in recognising the economic value of cryptocurrencies and extends legal protection to those who hold them.
The decision is expected to have far-reaching implications for the cryptocurrency landscape in China. It not only acknowledges Bitcoin as property but also emphasises the importance of protecting the rights of individuals involved in cryptocurrency transactions.
As China continues to navigate the evolving world of digital currencies, this ruling offers clarity and legal safeguards for Bitcoin holders in the country. It remains to be seen how this precedent will influence future cryptocurrency-related cases and potentially shape the regulatory framework for digital assets in China.
About the author
Anjali Kochhar covers cryptocurrency stories in India as well as globally. Having been in the field of media and journalism for over three years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.
