In a recent court ruling, the Shanghai High People’s Court has affirmed Bitcoin to be a legal, virtual property with economic value and subject to property rights.
Court Ruling Assigns BTC With Property Rights
The ruling was in the context of an October 2020 lawsuit case filed in the Shanghai Baoshan District People’s Court, where the plaintiff Cheng Mou demanded that the defendant Shi Moumou return the 1 BTC that the latter had borrowed from the former. The Shanghai court ruled in favor of the plaintiff, and the defendant was ordered to return the Bitcoin, which he failed to do so. The case then returned to court, and a mediation followed. It was discovered that the defendant no longer held possession of the Bitcoin, therefore a bipartisan agreement was reached that the plaintiff would be compensated at a discount from the value of the Bitcoin at the time of the loan. This ruling clearly recognizes that Bitcoin has value, scarcity, and disposability, and therefore meets the definition of virtual property and is subject to property rights.
However, because of China’s fraught history with crypto and the nationwide ban on this digital asset, the court couldn’t name a specific number for the compensation. In addition, the current value of the loaned BTC could not be determined, as the court’s investigative and enforcement authorities were held back due to the limitations imposed on its inquiries about virtual property.
Bitcoin And China
It has been a rocky road for crypto in China. What used to be the leading force of crypto mining and trading has now been lying barren of all crypto operations. Till 2019, the country was the hub of almost two-thirds of the global bitcoin mining capacity. However, the following years saw the Chinese government coming down hard on BTC miners all across the country. Mining operations were being shut down one after the other. A final nail in the coffin was when the People’s Bank of China announced a comprehensive ban on all crypto transactions. The crackdown sent out ripple effects globally on the crypto market, with the value of BTC stumbling quite a bit.
Several leading crypto exchanges had to wrap up their China operations and take their business overseas. Huobi, which used to be the largest Chinese crypto exchange, was one of the victims of this uprooting. The individual Bitcoin miners, who bear the burden of shifting base overseas, were the worst affected. The move, however, ultimately benefited several cities and towns in the US that welcomed the miners with open arms.
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.
Credit: Source link