China court says Bitcoin is a commodity but warns its related uses are illegal
Cryptocurrencies are considered commodities in China and are not explicitly prohibited by law, according to commercial judge Sun Jie at Songjiang District People’s Court in Shanghai.
However, crypto activities — like trading, issuance, or payments — are considered illegal financial activities.
Judge Sun Jie says Bitcoin is a commodity but warns that engaging in crypto carries legal risks. (Songjiang District People’s Court)
Sun’s statement posted on Songjiang Court’s official WeChat channel provides legal guidance on cryptocurrencies during a booming market cycle, which she calls the new “gold rush.”
The judge was commenting on a case during the 2017 crypto “gold rush” in which a defendant provided token issuance guidance services to a plaintiff for a cost of 300,000 yuan (around $44,000 at the time). The defendant delivered the service by drafting a white paper but did not assist in token issuance, which they believed was the plaintiff’s responsibility.
Sun stated that the contract agreement between the two parties was declared invalid as the crypto-related services outlined in the contract were considered illegal financial activities. However, she said while it is illegal for commercial entities to issue tokens or participate in transactions, “it is not illegal for individuals to simply hold virtual currency.”
The Shanghai court’s interpretation aligns with a recent case in the Jiahe County People’s Court in Hunan province of south-central China.
According to the municipal-owned media outlet Rednet on Nov. 21, the court recently rejected a plaintiff’s claims that demanded the return of $6.27 million in USDT.
The dispute stems from a November 2021 WeChat agreement in which the plaintiff paid $23.67 million in USDT for crypto mining equipment, but differences between the parties arose over time.
The court said that cryptocurrencies like Bitcoin, Ether and USDT are not legal tender and…
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