Chinese Court Declares Personal Crypto Ownership Legal In Mainland China

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As a researcher with a keen interest in the dynamic world of finance and technology, I find this recent Shanghai court ruling to be a significant step towards clarifying the legal status of cryptocurrencies in China. Having closely followed the evolving regulations surrounding digital assets in this vast and complex market, I can’t help but feel a sense of relief at the explicit legal clarity now provided for individual crypto holders on the mainland.

Bitcoin and crypto ownership in China have been debated and have raised policy questions for years. But a recent Shanghai court ruling clarified that it’s perfectly legal for citizens to hold, buy, and sell Bitcoin or other cryptocurrencies.

In a WeChat article, Judge Sun Jie from Shanghai’s Songjiang People’s Court clarified that it is not against the law for Chinese individuals to own cryptocurrencies. However, business entities are currently prohibited from keeping, purchasing, or selling cryptocurrencies freely, as previously decided by the courts. These comments were made during a case analysis of an illegal initial coin offering lawsuit involving two companies in China.

Coin Offerings Remain Illegal

In 2017, Judge Sun Jie’s comments were related to a case review concerning two businesses dealing with digital assets. As per the records, one agricultural company declared its interest in funding a digital asset. Subsequently, it collaborated with an investment firm to draft their whitepaper and distribute the tokens.

In simpler terms, a court in Shanghai has made it clear through a statement that owning cryptocurrencies does not violate Chinese law, providing straightforward legal guidance to crypto owners on the mainland during a significant increase in the price of Bitcoin.

Sun Jie, a judge at the Shanghai Songjiang…

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Later, an agricultural business signed a Blockchain Innovation Partnership with an investment group. After penning their token’s proposal document, this investment group received 300,000 Yuan for its work. Under these terms, the agricultural business assumed that the investment group would issue the tokens. However, this marked the beginning of a disagreement, prompting the company to demand a complete refund.

Planned Token Financing And Release Is ‘Potentially Illegal’

As a crypto investor, I’ve come to understand that the proposed funding and issuance of these tokens, as outlined in Judge Jie’s notes, could potentially be against the law. This initial coin offering seems to fall under the umbrella of unlawful public financing. The court has made it clear that no entity or individual is allowed to finance or distribute digital assets illegally.

In this case, the court dismissed the agricultural company’s complaint as it found that the proposed funding and token issuance would have violated the law. However, following a thorough review, the court ordered the investment firm to return 250,000 yuan.

Court Raises Risks Of Cryptocurrencies

According to Judge Sun Jie’s explanation in those notes, owning cryptocurrencies isn’t considered unlawful. Nevertheless, she emphasized that the Chinese administration enforces tight regulations due to the inherent risks associated with them.

In essence, the regulations surrounding cryptocurrencies in business are often adjustable due to their potential influence on financial and economic structures. According to Judge Sun Jie, this is the main justification behind China’s stringent regulations governing the use of cryptocurrencies.

In 2017, China initially prohibited initial coin offerings and shut down digital currency trading platforms. The crackdown on cryptocurrencies persisted in 2021, with the additional restriction of crypto mining and other crypto-centric ventures.

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2024-11-23 12:40