Bitcoin (BTC) has now been declared as a legally recognized virtual property by a Chinese court. As per the Hangzhou Internet Court ruling, Bitcoin has the characteristics to be regarded as a virtual property and thus owning Bitcoin will be legal in China. The court also said that the digital currency thoroughly meets the criteria of a virtual property’s definition as it is scarce, has value, and is disposable too. Moreover, all those who hold BTC will find themselves protected by the legal system of the nation, as first reported by The Beijing News.
The ruling came as the first case of bitcoin property infringement, filed with the Hangzhou Internet Court a couple of years ago, was resolved yesterday. Established in August 2017, the Court is dedicated to tackling internet-based cases in China.
It must be noted here that China had previously banned crypto trading as well as Initial Coin Offerings (ICOs) in the year 2017. Although Bitcoin doesn’t enjoy the status of the legitimate currency, it’s been given the status of a commodity with equivalent property rights. This acknowledgment by the court will play a significant role in cases of disputes in the future involving BTC or other cryptos, opined an attorney in the case named Pang Lipeng.
What the case was about?
The case traces back to 2013 when Wu, the plaintiff, purchased 2,675 BTC for RMB 20,000 from a website named FXBTC through an online marketplace called Taobao. He then stored the coins in the website’s wallet.
In the May month of 2017, the plaintiff tried accessing these funds but discovered the website had shut long back in 2014. After failed attempts at contacting the website operator and recovering his Bitcoins, he filed a lawsuit against both Taobao and FXBTC. His complaint stated that there was no notice given by the operator before shutting the site, which led to him losing his funds. The plaintiff demanded that Taobao and FXBTC jointly pay him about RMB 76,300 (11K USD) as compensation.
The plaintiff’s claims found rejection by the court as he failed to furnish evidence that proved he owned Bitcoins. Also, there was zero proof which obligated the two involved parties to cover his losses. Thus, the only good that came out of this lawsuit is the acknowledgment of Bitcoin as virtual property.
The verdict of the case has sparked a pleasant wave in the Chinese crypto enthusiasts. Many took to the micro-blogging site to spread the word.
It is not the first such instance, though. Prior to this, the Shenzhen Arbitration Commission, in 2018, had passed a ruling saying that crypto-assets should be protected under the Chinese regulations concerning property ownership.