A ruling this week by the Shenzhen Court of International Arbitration has confirmed that Bitcoin can be lawfully owned on Chinese soil. As a result, Chinese citizens are now formally entitled to view Bitcoin and other cryptocurrencies as property because they are deemed to have inherent economic value.
BITCOIN “PROVIDES ECONOMIC VALUE AND BENEFITS”
On Thursday, the Court used WeChat to publish its findings of a recent dispute that centred on the possession and transfer of 20 Bitcoin, 50 Bitcoin Cash and 12.6 Bitcoin Diamond worth almost half a million US Dollars.
According to the released case analysis, the plaintiff had a signed agreement that allowed another party to manage and trade the cryptocurrencies on their behalf. However, they claimed these crypto assets were not returned to them by an agreed deadline which left them no alternative but to turn to the Court for help.
Ironically, despite originally proposing to trade Bitcoin on behalf of the plaintiff, the defendant claimed in their defence that the contract was invalid because the people’s Bank of China (PBOC) had banned ICOs and cryptocurrency trading in September 2017. This, they suggested, meant that any payment or transfer of cryptocurrencies within China was illegal so the contract in question was null and void.
Ruling in favour of the plaintiff, the Court made clear that the case was about contractual obligations for returning cryptocurrencies which was not connected to the PBOC ban.
Even though China-based exchanges have suspended their activities because of the ban, the Court noted that technically that fact does not prevent the defendant from sending the assets at dispute to the plaintiff upon the agreed deadline.
The arbitrator’s decision, while not altering the country’s ban on ICOs or virtual currency trading, established that, whilst cryptos cannot be deemed to be have a monetary equivalence to traditional fiat currencies, Bitcoin has the nature of a property, which can be owned and controlled by parties, and is able to provide economic values and benefits.
