A recent ruling by the Shanghai Songjiang People’s Court in China has clarified that owning cryptocurrencies is not illegal in the country. The judgment, delivered on Nov. 18, established that digital assets have “property attributes” under Chinese law. However, their use is strictly limited to personal ownership and as commodities, not as legal tender or investment tools. The ruling came as Judge Sun Jie handled a case involving two companies disputing an initial coin offering, which is deemed illegal in China. She explained that while Chinese law does not explicitly prohibit holding cryptocurrencies, regulatory provisions from the People’s Bank of China and other authorities strictly control crypto-related business activities.
Judge Sun emphasized that virtual currencies do not have the legal status of official tender but hold property value as virtual commodities. She stated that individuals can legally possess cryptocurrencies but businesses face significant restrictions, as they are prohibited from engaging in crypto investments, trading, or token issuance. In summary, while it is not illegal for an individual to hold virtual currency, commercial entities in China cannot participate in virtual currency investment transactions or issue tokens at will. This clarification has brought some relief to the crypto community, as it suggests a potential softening of China’s historically strict stance on Bitcoin and other cryptocurrencies.
Bitcoin advocate Max Keiser sees the ruling as a significant shift, indicating that China may be starting to recognize Bitcoin’s growing influence. Eliézer Ndinga, VP at 21Shares, explained that the legal position remains unchanged, with individuals always allowed to hold cryptocurrencies in China, while commercial crypto-related activities have long been banned. He noted that China does not have anything equivalent to the US’ Executive Order 6102, which banned holding gold in 1933. Despite China still viewing cryptocurrencies as a threat to financial stability, recent developments such as Nano Labs—a China-based crypto mining chip company—accepting Bitcoin payments have sparked speculation about a possible gradual shift in the country’s approach to cryptocurrencies.
These developments come amidst Bitcoin’s value continuing its upward trend, partly fueled by Donald Trump’s recent election victory. According to CryptoSlate’s data, the top asset is trading above $97,000 as of press time. The positive reactions from the crypto community to the Shanghai Court ruling suggest that there may be a possibility of looser restrictions on cryptocurrency ownership and use in China. While commercial crypto-related activities are still prohibited, the clarification on personal ownership of cryptocurrencies is seen as a step towards a more accommodating stance towards digital assets in the country.
