Chinese law allows personal cryptocurrency ownership but restricts company crypto activity, according to Shanghai court decision.
Cryptocurrencies are property-like virtual commodities.
Personal rights and financial stability are balanced by regulations.
A Shanghai court ruled that Bitcoin is legitimate under Chinese law. This opinion was posted by Shanghai Songjiang People's Court Judge Sun Jie on the Shanghai High People's Court WeChat account.
Judge Sun stressed that Chinese people may own cryptocurrency but not businesses. Companies cannot invest in or sell cryptocurrencies without regulation.
The interpretation occurred during the court's consideration of a legal dispute between two firms over an ICO, which is unlawful fundraising in China.
Digital currencies might undermine China's financial system. Nationwide ICOs and cryptocurrency exchanges were outlawed last year. It banned Bitcoin mining and crypto business in 2021 to intensify its crackdown.
China's cryptocurrency ownership policy Beijing's view on digital assets varies as the world's cryptocurrency trends shift. Chinese law treats cryptocurrencies as virtual commodities with property-like traits, enabling people to hold them as personal assets, Judge Sun said.
China wants to defend its financial systems against illegal computerized monetary activities, especially those related to computerized money.
The case of Yao Qian, a former head of the People's Bank of China's digital currency research center, exposed China's cryptocurrency regulatory difficulty. Local media said that Qian was fired from the government after an inquiry discovered that he took large amounts of bitcoin for political favors. The case highlights Qian's involvement in regulating tensions and inconsistencies.
Even with the current ownership clarification, industry insiders knew individual cryptocurrency ownership was unofficially permitted. Chinese courts recognize digital assets as property under current law.
