China's Legal System Recognizes Crypto Assets as Property - COINTURK NEWS
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China’s Legal System Recognizes Crypto Assets as Property

5:15 pm (20 days ago)
September 1, 2023

A People’s Court in China has published a report analyzing the criminal law characteristics of crypto assets, stating that virtual assets are still legal property and protected by law under the current legal policy framework. Crypto regulations in China are still strict, and the use of crypto assets is restricted throughout the country.

Crypto Assets are Property According to the Law

Contrary to popular belief, the People’s Courts of the People’s Republic of China exercise judicial power independently and are not subject to any administrative or public intervention. These courts handle criminal, civil, administrative, and economic dispute cases.

According to a local newspaper, the report titled “Determining the Ownership Characteristics of Crypto Assets and Disposal of Property Involved in the Case” acknowledged that crypto assets possess economic characteristics and can therefore be classified as property. Although China has deemed all foreign digital assets illegal by imposing a general ban, the report argues that individuals’ ownership of crypto assets should be legally recognized and protected under the current policy framework.

The report also included recommendations for addressing crimes related to virtual assets, stating that criminal and civil law should be based on the inability to seize money and property involved in the case. These cases are dealt with separately to ensure a balance between personal property rights and social and public interests.

The Government is Easing its Policy

China had imposed a general ban on all crypto-related activities and prohibited foreign crypto exchanges from providing services to customers residing in the country. However, despite a hostile national policy towards crypto assets, Chinese courts have exhibited a contradictory stance on Bitcoin and other digital assets over the years.

The first example of this difference emerged in September 2022 when a lawyer claimed that crypto asset owners in China are protected by law in cases of theft embezzlement or violation of a credit agreement, despite the crypto ban. Later in May 2022, a Shanghai court confirmed that Bitcoin is classified as virtual property and therefore subject to property rights.

China’s hostile attitude towards Bitcoin and other cryptocurrencies has been ongoing for a long time, but in recent years, the government seems to have softened its stance. This can be seen from the increase in China’s Bitcoin mining share, which dropped to zero after the ban but rose to second place within a year.

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