In past articles, I've written about how the legal status of Bitcoin has been a bit of a gray area. It's been challenging to get a straight answer on the legality of owning and transferring Bitcoin. Even Chinese Law Experts I’ve talked to seem confused.
As someone that has bought Bitcoin from other individuals, I’ve occasionally been nervous. I also have a guide on purchasing Bitcoin in China on this website.
The Case Analysis
Well, I found an article from October of 2018, that may help to resolve the uncertainty around the issue. In the article, the Shenzhen International Court of Arbitration published a case analysis of Bitcoin arbitration. Lawmakers had decided that it was not illegal to allow the defendant to trade and manage a Cryptocurrency portfolio on someone else’s behalf.
The Defendant was being accused of holding out on Cryptocurrencies worth more than $493,158.40. These holdings were split between three different currencies. The denominations were 12.66 BCD (Bitcoin Diamond), 20.33 BCH (Bitcoin Cash), and 20.13 BTC (Bitcoin).Reasoning
The reason they had to make a ruling on this was that the Chinese government had banned Cryptocurrency trading the previous year. This also included ICOs which were regarded with extreme suspicion as possible vehicles for fraud.
The court declared that the contract in question was valid. As long as the arrangement does not involve an ICO, it was legal for the parties to transfer the digital assets between each other. This meant that the terms of their contract was legally binding and should be upheld.
The case analysis included the clarification:
“Bitcoin has the nature of property, which can be owned and controlled by parties, and is capable of providing economic value and benefits.”
“Bitcoin has the nature of property, which can be owned and controlled by parties, and is capable of providing economic value and benefits.”
So holding crypto is perfectly legal as according to this ruling, as long as it is not used for trading or ICOs.
The Twitter account, cn.Ledger tweeted:
Questions and Answers
Can you use Bitcoin in China?
On September 4th of 2017, China halted domestic trading of Bitcoin and banned "initial coin offerings" (ICOs), but there has been no known legislation stating that owning and transferring digital assets is against the law.
Is Bitcoin legal in China?
Yes, Bitcoins and other Cryptocurrencies are regulated as property as they provide economic value and benefits.
Wondering how someone might go about buying Bitcoin in China? Read my step-by-step guide:
Learn More About Buying Bitcoin in China.