Key Points
- A Shanghai court has confirmed that personal ownership of cryptocurrencies is legal in China.
- This legal clarification coincides with a significant surge in Bitcoin’s price.
A Shanghai court has recently made a landmark decision, ruling that personal ownership of cryptocurrencies does not violate any Chinese law.
This unexpected legal clarification has provided much-needed assurance for crypto holders in mainland China, marking a shift in the country’s stance on digital assets.
Bitcoin’s Price Surge
This announcement interestingly coincided with an extraordinary surge in the price of Bitcoin, which is approaching the $100K mark and fueling ongoing speculations.
Judge Sun Jie’s Statement
Judge Sun Jie of the Shanghai Songjiang People’s Court has provided much-needed legal clarity for cryptocurrency holders in mainland China.
In a statement published on the Shanghai High People’s Court’s official WeChat account, Sun confirmed that it is not illegal for individuals to hold cryptocurrency.
Despite the ongoing ban on cryptocurrency transactions that was imposed in 2021, this ruling offered a significant legal distinction.
This highlighted that personal possession of digital assets does not violate Chinese law, even as regulatory restrictions on crypto trading remain in place.
Sun explained the difference between owning and transacting in cryptocurrencies, emphasizing a high-pressure crackdown on speculative activities in cryptocurrency trading.
This clarification was made during a case review involving a legal dispute between two companies over an ICO, which remains prohibited in China, alongside cryptocurrency mining.
China’s Crypto History
In 2021, China’s government imposed a ban on cryptocurrency trading and Bitcoin mining following a surge in BTC’s price to $64,000, which led to a market correction with Bitcoin dropping to $30,000.
Despite this, Chinese citizens continued holding cryptocurrencies, using foreign exchanges to buy and sell.
Many speculate that China’s recent move may be a response to former President Donald Trump’s push to establish the U.S. as a global crypto hub.
However, it’s important to note that China’s dominance in the cryptocurrency space remains unquestionable.
China still controls over 50% of the global Bitcoin hash rate, dominating mining operations.
Moreover, Chinese investors are finding alternative ways to engage in crypto, prompting questions about China’s long-term strategy.
Hence, former Vice Minister of Finance Zhu Guangyao’s recent call for the government to reassess its stance on cryptocurrencies. This reflected the complexities surrounding China’s position as global trends and policies evolve.
Clarification on Legal Stance
Eliézer Ndinga, Vice President at 21Shares, clarified that the legal stance in China has remained consistent.
While individuals have always been allowed to hold cryptocurrencies, commercial crypto activities, including trading and mining, have been prohibited for some time.
He put it best when he said, “China has nothing like the Executive Order 6102, which forbid holding gold in 1933 in the US.”
