Cryptocurrency Is Virtual Property That Is Protected by Law, Chinese Court Rules

Recently, a Chinese intermediate court located in Beijing upheld a ruling by a lower court that determined cryptocurrency to be a protected virtual property under the law. The court clarified that the Bank of China regulations and other regulations do not prohibit the circulation of virtual currencies.

"Financing Behavior Prohibited By the Law"

A report claims that a Chinese intermediate court recently upheld a lower court’s decision to make litecoin a virtual asset protected by China's laws. The court clarified that virtual currency is not prohibited from being circulated or used as currency by the relevant administrative regulations of China.

Ding Hao, a Beijing resident who sought to have the court overturn the lower court's decision in a case where he was accused of not returning 33,000 litecoins (LTC) according to an agreement with ZhaiWenjie.

A court document reveals that Hao received 50,000 LTC on December 5, 2014. He was then required to repay this amount in four installments. According to court documents, the last repayment of 8,334 LTC was due to have been made by October 15, 2015.

Hao, however, claimed that Wenjie was wrongly ruled by the lower court. He cited regulations from the Bank of China and other relevant agencies that stated that virtual currency is not covered by the law. Hao also tried to frame his loan agreement with Wenjie in a "financial behavior prohibited by law" and it should therefore not be protected.

'LTC is a Network'

However, Hao's claims were rejected by the Chinese intermediate court, which insisted that Hao's regulations are only "regulatory opinions" that do not diminish Hao’s obligations.

Concerning cryptocurrency, the court determined LTC is a "network cryptocurrency" but it does not possess key properties such as legal compensation or compulsion. Accordingly to the court, Wenjie has rights to such property.

The court document stated that "Litecoin has the properties virtual property and virtual good… ZhaiWenjie can enjoy the corresponding rights and the basis for the property right claim."

Accordingly, the intermediate court ruled in favor of the lower court's decision and ordered that Hao return the 33,000 LTC he owed to Wenjie. News reported a similar story in China about bitcoin earlier this year. It was published in May.

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By: Terence Zimwara
Title: Cryptocurrency Is Virtual Property That Is Protected by Law, Chinese Court Rules
Sourced From:
Published Date: Fri, 16 Sep 2022 22:30:30 +0000

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