China Court Recognizes Virtual Assets as Legal Property Protected by Law

Summary:

A recent report from a People's Court in China has declared virtual assets as legal property and as such, should be protected by the country's laws. This comes despite China's blanket ban on all foreign digital assets. The report also suggests guidelines for dealing with crimes involving virtual assets, emphasizing the need for a balance between personal property rights and public interests.

Recognition of Virtual Assets as Property:

The report, titled "Identification of the Property Attributes of Virtual Currency and Disposal of Property Involved in the Case," acknowledges that virtual assets have economic value and can be classified as property. It argues that virtual assets held by individuals should be considered legal and protected by law under the current policy framework, despite the ban on foreign digital assets imposed by China.

Guidelines for Dealing with Crimes:

The report also provides suggestions for handling crimes involving virtual assets. It proposes that since money and property involved in these cases cannot be confiscated, a unified approach combining criminal and civil law should be adopted. This approach aims to achieve a fair balance between protecting personal property rights and safeguarding social and public interests.

Contrasting Stance on Virtual Assets:

China's national policy on virtual assets has been hostile, with a blanket ban on crypto-related activities and foreign crypto exchanges prohibited from serving mainland customers. However, Chinese courts have taken a different stance on virtual assets over the years. In September 2022, a lawyer suggested that crypto holders in China are protected by the law despite the ban. In May 2022, a Shanghai court affirmed that Bitcoin qualifies as virtual property with property rights.

Changing Attitude:

While China has been known for its tough stance on Bitcoin and cryptocurrencies, recent developments suggest a softening of its approach. The government's crackdown on Bitcoin mining led to a drop in China's mining share to zero, but within a year, it rose to become the second-largest mining country. Similarly, Binance, a major cryptocurrency exchange, has faced scrutiny in the United States, with the Department of Justice fearing a run on the platform.

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