In a case involving an unpaid debt, a Shanghai district court determined the legal status of Bitcoin by ruling on the entitlement of a Bitcoin owner to restitution.
An official document from Shanghai’s High People’s Court declares that Bitcoin is subject to the city’s property rights rules and regulations. An October 2020 district court action seeking the return of a one-Bitcoin loan was the basis for this conclusion. According to the lower court, Bitcoin has value, scarcity, and disposability, making it a kind of property subject to property rights.
The defendant Shi Moumou was ordered to return the Bitcoin by the Shanghai Baoshan District People’s Court, according to the Sina website. A mediation session was arranged in May of 2021 after the defendant failed to do so. To make up for his loss of control over the Bitcoins, the defendant agreed to pay a lower amount than what the bitcoins were worth when they were loaned out to plaintiff.
Due to China’s restriction on Bitcoin trading, the value of the lent Bitcoin could not be determined. A further hurdle, in this case, was the inability of court investigators and enforcement agents to look into the virtual property, as reported by the newspaper in question.
In 2017, China stepped up its attempts to clamp down on bitcoin trade. The authorities began systematically disconnecting bitcoin miners from the electrical grid and KV against crypto marketplaces. Since then, it has shifted its focus to “illegal financial operations connected to the NFT.”
China, on the other hand, has caught the world by storm by adopting a digital currency issued by the central bank (CBDC). The first extensive deployment of the digital yuan was during the Beijing Winter Olympics, despite COVID-19 regulations.