Digital currencies not protected by law

Digital currencies not protected by law, Chinese court rules in latest blow

China has been cracking down on digital currencies seemingly harder every year. This year, it has been booting out block reward miners in an aggressive move that has seen many of them leave for neighboring countries and even the United States. In the latest blow, a court in China has ruled that digital currencies are not protected by the law in an appeal ruling that has seen a man lose $10,000.

The unnamed man invested 70,000 Chinese yuan in 2017 to purchase tokens endorsed by his friends. However, the People’s Bank of China reiterated its ban on banks handling digital currencies and lead to the man losing access to his funds.

In search of justice, the man went to a court in Jinan city, where a judge ruled in January 2021 that digital currencies did not have legal status and his claims were thus not justifiable. Jinan city’s intermediate court upheld the ruling in a March appeal. He would then take his appeal to a high court in Northern Shandong, but as a local report reveals, the rulings have been held.

“Investing or trading cryptocurrency isn’t protected by law,” the judge ruled, as reported by South China Morning Post.

The ruling could set a precedent in the Asian economic giant, SCMP reports. In a country where digital currencies are already under intense clampdowns, exempting them from legal protection could prove further detrimental and even spur scams.

Damaging as this could be, it’s not the first time that a Chinese court has ruled that digital asset investors are not entitled to legal protection. In May 2020, an investor who had put in $70,500 in what turned out to be a BTC scam went to court to demand justice. However, the Changting People’s Court in Fujian province ruled that BTC is a virtual commodity and does not fall under its jurisdiction. It then dismissed the lawsuit and denied the investor a shot at justice.

While it would appear most Chinese courts hold that digital currencies are not protected by the law, there have been contrasting rulings in the past. About a month before the Fujian ruling, a court in Shanghai ruled that burglars who had forced a couple to transfer their BTC to them must return the digital currency or pay the yuan equivalent.

While the robbers argued against paying the victims in yuan as “the current Chinese laws do not recognize the property attributes of Bitcoin,” they eventually paid back 19 BTC to the couple.

Watch: CoinGeek Zurich panel, The History of Money & The Future of Bitcoin

YouTube video

New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.