tl;dr
The Shanghai High Court ruled that cryptoassets have "property attributes" and are not outright prohibited by Chinese law, but are only protected as a commodity, not as currency or business instruments. The ruling came in a fraud case involving illegal token issuance and financing activities, condem...
The Shanghai High Court recently ruled that cryptoassets have "property attributes" under Chinese law but are prohibited from being used as currency or business instruments. The court condemned illegal token issuance and financing activities, emphasizing the value of cryptocurrency as a commodity. While China shows interest in crypto for cross-border payments, it maintains strict restrictions on crypto usage, citing its potential to disrupt the financial system and facilitate illegal activities.
The ruling came as a response to a fraud case involving illegal token issuance and financing activities, where the court condemned the actions in strong terms. The court emphasized that while cryptocurrencies have legal applications, using them for major business transactions, especially for launching new tokens, remains strictly forbidden, reflecting China's anti-crypto stance.
According to the ruling, cryptocurrency is not outright prohibited by Chinese law but is only protected as a commodity, not as currency or business instruments. The court's comments came in a case involving two businesses and a failed token launch, where the actions were strongly censured.
While the ruling took a harsh view of the core dispute between the companies, it also stressed that crypto holds value as a commodity, with no prohibitions existing in this regard.
Despite the international interest in reintroducing crypto to China after the 2021 Bitcoin mining ban, there is little sign of a broader shift in China's stance on crypto. The court's acknowledgment of some legal applications of cryptocurrencies was juxtaposed with its stern handling of the case at hand, indicating China's firmly entrenched anti-crypto stance in official policies.
China continues to support crypto and blockchain technology for cross-border payment solutions at international summits, and it has its own digital currency, the digital yuan, actively used for international trades. However, the court's ruling reflects China's ongoing strict restrictions on cryptocurrency usage, citing its potential to disrupt the financial system and facilitate illegal activities.