Chinese Court: Crypto Can Be Owned, But Trading Is Banned

The news offers a breath of fresh air to crypto owners in mainland China. Judge Sun Jie of the Shanghai Songjiang People's Court affirmed that

A Shanghai court judge has clarified that individual ownership of cryptocurrencies does not break any Chinese law, in a recent court ruling.

The news comes as a breath of fresh air to crypto owners in mainland China, as Judge Sun Jie of the Shanghai Songjiang People’s Court has affirmed that individuals can legally own crypto as property.

According to the judge, Chinese law recognizes crypto as a virtual commodity with attributes of property. However, Chinese rules do not allow individuals to participate in trading or initial coin offerings (ICOs).

In her statement, Judge Sun wrote, “Although it is not illegal for individuals to simply hold virtual currency, commercial entities cannot participate in virtual currency investment transactions or even issue tokens on their own.”

She went on to highlight some of the dangers of crypto activities, stating, “Virtual currency trading speculation activities such as Bitcoin will not only disrupt the economic and financial order but also may become a payment and settlement tool for illegal and criminal activities, breeding money laundering, illegal fund-raising, fraud, pyramid schemes, and other illegal and criminal activities.”

China has maintained a tough stance on crypto-related business activities for years. In 2017, Beijing banned ICOs and shut down local crypto exchanges. The crackdown escalated in 2021 with a nationwide ban on Bitcoin mining and the declaration that all cryptocurrency-related businesses were illegal.

While local courts have previously ruled that cryptocurrencies should be treated as property, China’s broader legal and regulatory framework remains highly restrictive.

Despite the recent court ruling, several Chinese lawmakers and experts have urged the government to reconsider its stance on digital assets. Notably, Zhu Guangyao, China’s former finance vice-minister, claimed the nation could fall behind rivals like the U.S. if it continues its tight-hand approach.