A Chinese arbitration court ruled in a case that cryptocurrency holdings should be legally protected as property. The ruling is a contrast to the injunction of the financial regulatory body in the country.
Cryptocurrency As A Legal Property In China
Though China has no clearly defined status on cryptocurrency, the country has developed a zero tolerance for cryptocurrencies, as the People’s Bank of China had banned cryptocurrency trading as well as ICOs related activities from holding in the country. This decision had led to the massive exodus of crypto startups from China to countries with friendly cryptocurrency injunctions.
The latest ruling of a Chinese arbitration court indicated that crypto holdings should be protected as a legal property with economic values. The ruling was given by The Shenzhen Court of International Arbitration, in a publication on Thursday via WeChat. This was delivered on an economic dispute that involved a business contract relating to possession and transfer of crypto assets.
The case analysis indicates that an unnamed man, the plaintiff signed a contract agreement with the defendant that enables the later to trade and manage volumes of crypto holdings on behalf of the plaintiff.
The defendant was stated to have violated the contract by refusing to return the cryptocurrencies after an agreed deadline. This led to taking the case to court, according to the plaintiff as he seeks the recovery of his assets with interest.
The digital currencies involved in the case as noted by the plaintiff includes, 20 bitcoin, 50 bitcoin cash, and 13 bitcoin diamond cryptocurrencies worth about $493,158 altogether.
Meanwhile, the major argument tendered by the defendant was that the ban by the People’s Bank of China on cryptocurrency trading and initial coin offering means that crypto payment and transactions should be illegal in China. The defendant also noted that the trading ban blocked the appropriate avenue to trade and send the crypto asset to the plaintiff.
The Arbitration Court Ruling
The court of arbitration ruled against the defendant by stating that the nature of the case is about the contractual obligation for returning cryptocurrencies, which does not fall under cryptocurrency trading or initial coin offering as outlined in the PBOC ban in September 2017.
The arbitration noted that no law bans crypto holdings in China and transaction between individuals. Also, is that suspension of crypto exchanges activities in China in 2017, does not stop the defendant from sending the crypto assets back to the plaintiff at the agreed time.
The court which is one of the Arbitration Committees established in China after the country enacted a law in 1995 enabling city governments to form such entities noted that “Bitcoin has the nature of a property, which can be owned and controlled by parties, and can provide economic values and benefits.”