Despite imposing a significant cryptocurrency ban one 12 months in the past, the Chinese authorities nonetheless protects native crypto traders as crypto is acknowledged as digital property protected by the legislation.
One of the world’s most hostile international locations towards Bitcoin (BTC), China has not but banned the possession of cryptocurrencies, in keeping with David Lesperance, founding father of Lesperance & Associates legislation agency.
Crypto holders in China are protected by the legislation in case of theft, misappropriation or breach of a mortgage settlement, Lesperance instructed Cointelegraph. He emphasised that crypto exchanges are nonetheless banned in China.
The lawyer referred to a current Chinese court docket case involving a breach of a mortgage made within the Litecoin (LTC) cryptocurrency. Defendant Ding Hao failed to completely pay again all 50,000 LTC that he borrowed from Zhai Wenjie in 2015, which turned a significant court docket precedent involving cryptocurrency in China.
Since 2015, the value of Litecoin has jumped roughly 1,800%, because the cryptocurrency was buying and selling at round $3 seven years in the past, in keeping with information from CoinGecko.
On Aug. 31, the Beijing No. 1 Intermediate Court dominated that the defendant owed Zhai the remaining quantity of Litecoin, rejecting Ding’s argument that the People’s Bank of China (PBoC) formally banned crypto transactions final 12 months.
“The court docket has upheld that cryptocurrencies like Litecoin are “property” regardless that they’re created within the digital realm,” Lesperance mentioned. He emphasised that the crypto neighborhood “shouldn’t draw any specific constructive inferences” from the case because it was a “very atypical” industrial mortgage dispute which was settled beneath regular property legislation guidelines, stating:
“To date, possession of crypto in China has not been banned. […] It doesn’t make the industrial buying and selling of this kind of property authorized, as the federal government has particularly banned crypto exchanges in China.”
While Lesperance says that crypto exchanges are banned in China, some native crypto lovers are assured that the PBoC has by no means explicitly banned people from buying and selling cryptocurrencies.
“It’s true that China would not need people to commerce crypto. But that is by no means being written in any formal doc,” an individual linked to the crypto trade in China instructed Cointelegraph.
Related: Chinese mining big Canaan doubles income regardless of the blanket crypto ban
According to the supply, many mainland customers see their financial institution playing cards frozen in the event that they use them for crypto over-the-counter (OTC) transactions. However, trusted OTC channels nonetheless permit crypto transactions in China.
“So regardless that buying and selling crypto is just not unlawful, we do not need to waste our time arguing with banks as a result of clearly, they assume every part about crypto is against the law,” the particular person mentioned.
The newest information brings one more piece of proof that crypto has not been completely suppressed in China for the reason that authorities introduced a coordinated crackdown on crypto in September 2021. As beforehand reported, China returned its place because the second-largest Bitcoin hash fee supplier as of January 2022.
