“Cryptocurrency is not protected by law” says the High Court of Northern Shandong Province

Team SoOLEGAL 1 Sep 2021 3:15pm

“Cryptocurrency is not protected by law” says the High Court of Northern Shandong Province

After evaluating a case regarding virtual tokens, the high court of Northern Shandong province said in public comments that “cryptocurrency is not protected by law,” in a ruling that could set a precedent for other Chinese courts now that investment as well as trading in digital assets like bitcoin is prohibited.

The court reached a decision after evaluating a case in which the plaintiff invested 70,000 yuan ($10,799) in crypto tokens recommended by his friends in 2017. However, the accounts were shut in 2018 after China's central bank, the People's Bank of China (PBOC), reaffirmed its prohibition on financial institutions dealing with cryptocurrency transactions.

An intermediate court in Jinan, Shandong's capital city, ruled in January that the plaintiff's fraud claim was baseless because crypto assets had no legal status in China. The plaintiff later filed an appeal, but the court upheld its decision in March.

This decision refutes numerous previous decisions by other Chinese courts. In My last year, the Shanghai No.1 Intermediate People's Court determined that bitcoin was a legal digital asset. The Shenzhen Futian District People's Court in Guangdong Province had declared ethereum to be legal property with economic value just a month before.

All whilst, China has intensified its efforts to set limits on crypto activities, such as the closure of mining farms. Last week, the PBOC's Shenzhen branch reportedly closed down 11 crypto-related businesses.

Tagged: Cryptocurrency   High Court   Northern Shandong province   Chinese courts   bitcoin   China's central bank   People's Bank of China   financial institutions   Shanghai   Shenzhen  
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