Cryptocurrency Declared Personal Property in China; Business Use Remains Prohibited
Shanghai Court Ruling Sparks Crypto Debate
A landmark ruling from the Shanghai Songjiang People’s Court has reaffirmed that cryptocurrency ownership is not illegal in China, clarifying its status as personal property under Chinese law. The Nov. 18 judgment, delivered by Judge Sun Jie, establishes that while cryptocurrencies hold “property attributes,” their use is restricted to personal ownership and as virtual commodities rather than legal tender or investment tools.
The ruling emerged from a dispute involving two companies over an initial coin offering, an activity explicitly banned in China. Judge Sun highlighted that while individuals are permitted to hold digital assets, businesses remain barred from engaging in any form of crypto investment, trading, or token issuance. She emphasized that virtual currencies lack legal tender status but retain property value, writing, “Although it is not illegal for an individual to simply hold virtual currency, commercial entities cannot participate in virtual currency investment transactions or even issue tokens on their own at will.”
This nuanced legal position aligns with regulatory provisions issued by the People’s Bank of China and other authorities, which strictly control crypto-related business activities while avoiding a complete prohibition on personal ownership. Analysts suggest the judgment underscores the Chinese government’s continued wariness of cryptocurrencies as a potential destabilizing force in the financial system.
The ruling has sparked optimism among global crypto enthusiasts, with many interpreting it as a subtle softening of China’s stringent stance. Bitcoin advocate Max Keiser hailed it as a sign of Bitcoin’s growing influence, while Eliézer Ndinga, VP at 21Shares, pointed out that the legal framework for personal crypto ownership in China remains unchanged. Ndinga noted that China’s policy differs significantly from historical precedents like the United States’ 1933 Executive Order 6102, which prohibited gold ownership.
Adding to the speculation of a potential shift, Nano Labs, a Chinese crypto mining chip manufacturer, has reportedly begun accepting Bitcoin payments. Despite ongoing restrictions on commercial activities, these developments coincide with Bitcoin’s meteoric rise, trading above $98,000 according to Coin360 data, bolstered in part by Donald Trump’s re-election victory.
While China maintains its cautious approach, this ruling is seen by many as a recognition of the inevitability of digital assets, reinforcing their role as a legitimate form of personal property in the face of stringent commercial prohibitions.
This article has been refined and enhanced by ChatGPT.
