Ruling in the instance of an outstanding loan case, a court in Beijing has found that cryptocurrency is protected by Chinese property laws.
‘LTC Is Not Currency’
The Beijing Number One Intermediate People’s Court has recently found that Litecoin (LTC) is a virtual asset that can be considered the property of an individual, similar to data. The court claimed that it is a virtual asset that fails to meet the standards of currency and therefore falls under the umbrella of personal property.
The court document says,
“According to the relevant administrative regulations and cases, our country only denies the monetary attributes of virtual currency and prohibits its circulation as money, but virtual currency itself is a virtual property protected by law.”
The ruling stands out in contrast with the country’s extremely strict crypto regulations. In 2021, China banned all Bitcoin mining and all crypto trading activities, bringing the country’s burgeoning crypto industry to a grinding halt. It resulted in a mass exodus of crypto miners who sought refuge in countries like the U.S. (particularly Texas) and Kazakhstan, where they could continue mining Bitcoin.
Dispute Over LTC Lending
The matter arose when two parties came to the court over a lending dispute involving the Litecoin (LTC) cryptocurrency. One of these individuals, Zhai Wenjie had lent the other, Ding Hao, 50,000 LTC back in 2015. Ding had promised to pay back the sum over a specific period but had failed to do so. The latter has claimed that the cryptocurrency ban imposed by the government has made it impossible for him to participate in any form of crypto transaction. However, the court did not accept that line of argument and chose to rule in favor of Wenjie.
Court Says Crypto Can Be Traded Despite Ban
The ruling by the Beijing court involves manipulation of the regulatory framework to make room for legal semantics. The court found a loophole around China’s ban of cryptocurrencies, by ruling that the contested LTC token does not qualify as a ‘currency,’ instead should be treated more as a property, similar to data ownership. Under this caveat, LTC and other cryptos fall under Chinese property laws, which deems such assets as legal to own and trade. Of the 50,000 LTC, Ding still owes Zhai around 33,000 LTC. Since it is being interpreted as property, Ding will have to pay back Zhai the current value of his outstanding loan, which is around $1.84 million.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
