A Shanghai court provides legal clarification on personal cryptocurrency ownership, bringing clarity to their legality in China.
Context of Legal Clarification
Judge Sun Jie from the Shanghai Songjiang People’s Court stated in an article on the Shanghai High People’s Court’s official WeChat account that it is not illegal for individuals to hold cryptocurrency. This statement provides much-needed clarity for cryptocurrency holders in China.
Exemptions for Commercial Entities
The judge's comments were made during a case review involving a business dispute between two companies over an initial coin offering (ICO), deemed illegal financing under Chinese law. Sun Jie emphasized that while individuals can legally own cryptocurrency, commercial entities are prohibited from engaging in cryptocurrency investments or issuing tokens.
Risks and Limitations of Cryptocurrency Trading
The judge described virtual currencies as “virtual commodities with property attributes,” distinguishing them from fiat currencies. Although individual ownership is not illegal, she warned that participating in cryptocurrency trading and investment could lead to financial instability and illegal activities such as money laundering and fraud.
The court’s opinion highlights an important distinction in China’s stance on cryptocurrencies: while strict restrictions on commercial activities exist, personal ownership remains legal, providing clarity to asset holders.
