A Chinese arbitration body said that Bitcoin and other cryptocurrencies are protected as property. The information was released on WeChat a few days ago by the arbitrator. The Twitter user @cnLedger also provided information about it.
Chinese Court Confirms Bitcoin is Protected by Law
According to a Chinese court, bitcoin is protected by law. The Shenzhen Court of International Arbitration has taken the decision in a case involving virtual currencies. The ruling of the case says that the law does not forbid owning and transferring bitcoin. As it is property in nature, it is protected by the law.
1/ Chinese court confirms Bitcoin protected by law. Shenzhen Court of International Arbitration ruled a case involving cryptos. Inside the verdict: CN law does not forbid owning & transferring bitcoin, which should be protected by law bc its property nature and economic value.
— cnLedger (@cnLedger) October 26, 2018
The court ruled in favour of an unnamed plaintiff after a dispute related to equity transfer. The defendant did not return holdings of some cryptocurrencies including Bitcoin (BTC), Bitcoin Cash (BCH) and Bitcoin Diamond (BCD).
Some reports explain that the contract authorized the defendant to trade and manage a portfolio of virtual currencies. Since the defendant did not return the holdings as previously agreed, the plaintiff decided to solve the issue int he court.
The defendant said that the equity transfer agreement was not valid. In order to sustain this position, he said that virtual currencies are not recognized as legal tender in the country. Additionally, China has always taken very hard policies on cryptocurrencies.
Although the defendant provided accurate information, the arbitrator found that the contractual it is not related to the 2017 prohibition. On the matter, the arbitrator explained:
“There is no law or regulation that explicitly prohibits parties from holding bitcoin or private transactions in Bitcoin, [only warnings to] the public about the investment risks. The contract, in this case, stipulates the obligation to return the bitcoin between two natural persons, and does not belong to the [Sept- 2017 ban].”
In the past, the central bank determined that virtual currencies shouldn’t be used as currency. Moreover, the banking institution informed that Initial Coin Offerings (ICOs) engage in unauthorized and illegal public financing.
The defendant will have to return the assets being worth $493,158.40 and pay a penalty of around $14,400 dollars.
Better rules for the cryptocurrency environment means a healthier system. In the future, with a clear framework, cryptocurrencies and companies would be able to grow and expand all over the world.
China is also one of the countries with the largest number of blockchain patents registered. There are several companies in the Asian country working with distributed ledger technology (DLT).
Carlos is an international relations’ analyst specializing in cryptocurrencies and blockchain technology. Since 2017, Carlos has written extensively for UseTheBitcoin and other leading cryptocurrency sites; with over 2,000 articles published.