Highlights:
- A Shanghai court has stated that individuals can legally hold cryptocurrencies, but trading and mining remain banned in China.
- China is still enforcing strict crypto bans as it focuses on financial stability and control.
- A former crypto official is facing charges for bribery, highlighting China’s tough stance on illegal cryptocurrency activities.
A Shanghai court has clarified the legal status of cryptocurrency ownership in China. According to Chinese law, individuals can legally hold cryptocurrencies. The decision had been made as part of a case review related to a business dispute involving an initial coin offering (ICO).
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According to Judge Sun Jie of the Shanghai Songjiang People’s Court, crypto ownership among individuals is not illegal. However, this does not extend to businesses where trading and mining continue to be banned.
NEW: 🇨🇳 Shanghai judge says #Bitcoin and crypto are property and that their ownership is legal in China. pic.twitter.com/BwlKPenvuQ
— Bitcoin News (@BitcoinNewsCom) November 21, 2024
This gives some clarity regarding holding versus trading cryptocurrencies in China. According to Judge Sun, cryptocurrencies are virtual commodities with property attributes. The move gives legal clarity to individuals as the country continues with its stand on cryptocurrencies.
Clear Divide Between Owning and Trading
As per Chinese law, the property rights of individuals owning cryptocurrencies are recognized. Authorities, however, do not permit speculative trading activities. Judge Sun also said that crypto-related businesses go against financial and economic stability. According to Chinese regulations, trading as well as mining cryptocurrencies are banned.
The court added that the prohibition is intended to prevent illegal financial activities and economic disruption. China has since 2017 strictly regulated cryptocurrencies by shutting down exchanges and banning ICOs. Authorities reinforced these restrictions in 2021 by banning mining activities.
Crypto Chief Faces Corruption Charges
A former central bank official, Yao Qian, has been implicated in a cryptocurrency corruption scandal. Yao is a former director of China’s digital currency research institute. He has been expelled from his position and the Communist Party for taking bribes and misusing his powers. Yao was accused by authorities of using cryptocurrency to facilitate illegal financial activities.
Yao Qian, a former official of China’s securities regulator, has been discovered to have accepted #cryptocurrency bribes and has been expelled from the Communist Party of China and dismissed from public office. https://t.co/ZBmnuO7dKU pic.twitter.com/BcQKYLbzLY
— Global Times (@globaltimesnews) November 20, 2024
The investigation found that Yao had arranged favors for certain technology suppliers in exchange for personal returns. He also misused his role to influence procurement decisions. His case has been referred to authorities for criminal prosecution.
Crypto Ban and Ongoing Testing Efforts
The Chinese government continues to enforce its ban on cryptocurrency-related activities. Authorities, however, are starting to trial the use of blockchain technology in regulated ways. In a recent test in Hong Kong, 200 mainland Chinese visitors were able to register for regulated stablecoin services. The trial was based on a decentralized identity system, allowing the users to remain anonymous.
🚀BREAKING NEWS!!!🚀
"Layer 1 Flare and Red Date Technology Set to Trial Stablecoin Buying for Chinese Nationals in Hong Kong"
This is huge… Expect a large inflow of stable coins onto the #FlareNetwork, potentially bolstering collateral potential for the #FAsset system!… https://t.co/fGYQefVWa7 pic.twitter.com/9pWIaWVkCf
— Flare Community ☀️ (@CommunityFlare) November 8, 2024
China’s RealDID platform was utilized by the system to verify identities, without exposing personal information. Participants were provided with an option to access tokenized financial products using a stablecoin pegged to the Hong Kong dollar. The trial shows how China is trying to innovate while preserving strict control of the crypto industry.
As the crypto market continues to grow globally, experts are calling on the government to open up the crypto market. According to them, crypto is integral to China’s digital economy. The government has shown no signs of easing its strict approach.
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