A case analysis (Chinese) posted on Thursday on WeChat explains that Bitcoin is property in China. According to the analysis, a plaintiff claimed the defendant refused to transfer an agreed amount of crypto citing crypto ban. However, the court rules that Bitcoin is property despite the fact that China prohibits cryptocurrency activities.
As Regulation Asia reports, the case came before Shenzen court of international arbitration (SCIA) for ruling. As per the case analysis, the defendant managed a pool of cryptocurrency belonging to the plaintiff. However, after the People’s Bank of China (PBOC) banned cryptocurrencies, the defendant deemed the contract null and void. Therefore, the unnamed defendant failed to return the cryptocurrencies after the agreed period elapsed.
Further, the defendant argued that there was no trading venue since the coming in of the ban. Therefore, it was impossible to transfer the cryptocurrency to the owner. However, in a landmark ruling, SCIA decided that cryptocurrencies aside, contractual obligations still hold. Therefore, the terms of the contract between plaintiff and defendant did not fall under the jurisdiction of the PBOC ban.
In addition, the court ruled that there is no law in China that prohibits possession of Bitcoin or any other cryptocurrency. Further, the PBOC ban does not prohibit person-to-person transactions in cryptocurrency. “Bitcoin has the nature of a property, which can be owned and controlled by parties, and is able to provide economic values and benefits,” the case analysis reads in part.
The ruling that Bitcoin is property got many by surprise
Further invalidating the defendant’s claim, the court observed that transfer of the digital assets did not require external means. In particular, both parties had wallet addresses and private keys through which they could transfer the digital assets. Therefore, the transfer was just a matter of moving the cryptocurrencies from one wallet to the other.
Reportedly, SCIA ordered the defendant to pay the plaintiff $401,780. This implies that the court based its calculations on the December 2017 market prices.
Following the ruling that Bitcoin is property, stakeholder reaction is one of surprise. Bill Barhydt, CEO of Abra Global said: “This is a big deal. “Chinese laws and regulations do not prohibit privately held and legally transferred bitcoin.”
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