Despite the fact that cryptocurrencies are still banned in China, a decision by the Shenzhen Court of International Arbitration on October 25 suggests that China’s lawmakers might be softening their stance towards the industry. It’s a move that could have a huge impact on bitcoin ownership in the world’s most populous country.
During this dispute, the court reached an important conclusion: bitcoin needs legal protection. It also found that, in similar cases, bitcoin should be treated as legal property. So, what does this mean for the crypto industry in China?
The case that could (possibly) change everything
In the Shenzhen bitcoin case, the plaintiff had signed an agreement with the defendant, in which the former allowed the latter to trade cryptocurrencies on his behalf. However, after the contracted period, the defendant refused to give back the agreed sum.
The court heard that the plaintiff had sent 50 bitcoin cash, 20.13 bitcoin, and 12.66 bitcoin diamond to the defendant’s private wallet. At the time, that was worth approximately $493,158 in total.
After the defendant refused to return the crypto assets, the plaintiff decided to take the case to court. However, China’s crypto ban gave the defendant a strong defence. Or so he thought.
The defendant claimed that the ban rendered his contract with the plaintiff illegal and invalid. Thankfully, common sense prevailed.
The court’s closing words: bitcoin needs legal protection
Even though the cryptocurrency ban is official, the court dismissed the defendant’s arguments. The court’s stance was that the parties had a contractual agreement stating that the defendant must return the money. As this contract was not affected by the cryptocurrency trading ban, it remained valid. Therefore, both parties needed to fulfill all conditions in the contract.
The court also ruled that the law does not forbid investors from possessing bitcoin or sending it to another individual, and that the cryptocurrency ban is not relevant to this case. Most importantly, however, was a statement that many around the world have been waiting to hear: bitcoin needs legal protection.