A Shanghai court has released an opinion stating that the personal ownership of cryptocurrencies is not against Chinese law, offering explicit legal clarity for crypto holders on the mainland amid a record-setting bitcoin price surge.
Sun Jie, a judge at the Shanghai Songjiang People’s Court, wrote in an article published on Shanghai High People’s Court’s official WeChat account this week that it is “not illegal for individuals to hold cryptocurrency”, even though Chinese business entities are not allowed to take part in cryptocurrency investments or token issuance “at will”. The comments were part of a case review for a recent lawsuit involving disputes between two companies about an initial coin offering, which is considered illicit financing in China.
Beijing sees cryptocurrencies as a threat to financial stability, and commercial activity related to these assets remains banned on the mainland, which has put their legal standing in doubt.
As a virtual commodity with the attributes of property, cryptocurrency ownership is not prohibited by Chinese law, Sun wrote. This does not extend to business activity, however, as it can disrupt economic and financial order or act as payment for illegal activity, according to the judge.
“That is why laws and regulations always maintain a high-pressure crackdown on speculative activities in cryptocurrency trading,” Sun said in the opinion.
Beijing first banned initial coin offerings and ordered the closure of crypto exchanges in 2017. It ramped up its crackdown in 2021, when it banned bitcoin mining and declared crypto-related business illegal.
