A court in China has ruled that crypto is an asset that can be traded between individuals as long as the asset is not used as a currency.
The recent ruling by The Beijing Number One Intermediate People’s Court upheld Chinese laws against virtual currencies, but simultaneously found that Litecoin (LTC) is a virtual asset that fails to meet the standards of currency.
The court went on to find that crypto assets such as Litecoin can be considered the property of an individual, much in the same way as data can.
The court document states: “According to the relevant administrative regulations and cases, our country only denies the monetary attributes of virtual currency and prohibits its circulation as money, but virtual currency itself is a virtual property protected by law.”
A costly friendship
The ruling of the Beijing court comes in the case of two friends, one of whom had lent the other 50,000 Litecoin. Zhai Wenjie stated that he had lent Ding Hao the sum of Litecoin (LTC) in 2015. Ding promised to pay back the sum over a set period, but failed to do so.
Ding had attempted to use China’s strict regulations as a defense against repayment, but the court was not inclined to favor that line of argument. Having considered the evidence the court in Beijing found in favor of Zhai.
Now Ding faces a far deeper problem. According to the court, the outstanding sum due to Mr Zhai is 33,000 LTC. In 2015 the price of a Litecoin was somewhere between $1 and $4. If Ding had paid the remaining balance seven years ago, the value of the outstanding loan would have been $132,000.
Today, with LTC trading at $59.93 a coin, the dollar equivalent value of the outstanding loan is $1,977,690. That’s a lot of not money in anyone’s book.
Chinese law, explained?
Cryptocurrencies remain subject to a ban in China. Crypto owners may therefore be thankful that a Beijing court has found that cryptocurrencies do not meet the standard of currency in China. Therefore, it is quite legal to own and trade cryptocurrencies in China, and for cryptocurrency and its owners, to be protected by Chinese property law.
Confused?
When explained in English, the contradictory nature of these statements – all true – seem to make very little sense. Some clarity may be lost in translation. More likely, the judiciary may be employing semantics to make rulings in an otherwise impossible regulatory framework.
In any case, Chinese lawmakers and judges are proving to be adept at finding wiggle room in the nation’s difficult regulatory landscape.
China remains a leader in adoption
Cryptocurrency adoption remains strong in China. This despite the confusing, complex and at times downright unfriendly system.
According to data published by on-chain analysis firm Chainalysis, the nation remains in the top 10 markets of global crypto adopters, but only just. China currently rounds out the top 10 in position number 10.
The number 1 nation in the world is Vietnam. Ukraine comes in at position 3, while Russia sits one place above China at number 9.
The full top ten is as follows:
- Vietnam
- Philippines
- Ukraine
- India
- United States
- Pakistan
- Brazil
- Thailand
- Russia
- China
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Source: https://beincrypto.com/china-court-rules-crypto-can-be-traded-despite-digital-currency-ban/