Bitcoin has been declared property under Chinese law by a high court in China’s financial capital of Shangai, which pits the government against its own anti-crypto position.
Bitcoin, according to a report from the Shanghai Baoshan District People’s Court issued Thursday, May 5, has “property features and is controlled by property rights rules and regulation,” the court declared.
the case of Cheng Mou’s lawsuit against Shi Moumou for the recovery of one bitcoin on October 10, 2020 was cited by the court in making its announcement It was only when the defendant failed to pay back the bitcoins that it became necessary to seek an order of apprehension. The defendant was sent an enforcement notice by the court, but he continued to default, alleging that he lacked Bitcoin.
Even while the court found that retrieving the Bitcoin was difficult due to the secrecy of the transactions, it nonetheless said that “Bitcoin exhibited the characteristics of value scarcity.” Because of this, it matched the standards for virtual property and possessed the features of a legal object. Since property rights are protected by law, the court had the jurisdiction to enforce and dispose of the property.
Though there was no way to retrieve the Bitcoin, an associate judge of the Executive Bureau of the Peoples Court of Bashoan District said that by following the proper legal procedure and verifying that in fact the plaintiff was promised money, she believes that the court may still execute its own verdict.
“Bitcoin is not irreplaceable, therefore there are two implementation plans, one is purchase and delivery, and the other is reduced compensation,” Zhengxiao said.
An Alarm Clock?
Bitcoin is now prohibited from trade in China, after a purge that started with proof-of-work mining in 2013. Until recently, Bitcoin enforcement has been unable to be enforced by courts because of the absence of applicable laws and regulations.
Even though China’s Civil Code states that “virtual property” is protected by law, Article 127 doesn’t go into specifics about its definition or applicability. It is so common for courts to serve as arbiters in crypto-related matters, urging parties to settle out of court or suggesting that they do so in exchange for reduced compensation.
As a result, the people’s court firmly stated that Bitcoin is virtual property, “since it has definite economic worth and adheres to the property qualities,” providing a precedent that might shape future rulings or, at the very least, soften China’s regulatory stance on crypto.