Cryptocurrency Is Virtual Property That Is Protected by Law, Chinese Court Rules – Regulation Bitcoin News

A Chinese intermediate court based in Beijing recently upheld a lower court’s ruling which determined that cryptocurrency is a virtual property protected by the law. This court clarified that the Bank of China regulations and other laws do not prohibit circulation of virtual currencies.

‘Financing Behaviour Prohibited by the Law’

An intermediate court in China recently upheld a lower court’s ruling that designated litecoin a virtual property protected by the country’s laws, a report has said. The court clarified that the country’s relevant administrative regulations only prohibit the circulation of virtual currency or its use as a currency.

The Beijing-based court’s ruling followed an appeal by Chinese resident Ding Hao who wanted it to quash the lower court’s ruling in a case in which he is accused of failing to return 33,000 litecoin (LTC) as per an agreement with Zhai Wenjie.

A court document reveals that Hao was given 50,000 LTC by Wenjie on December 5, 2014. He had to repay this amount in four installments, according to the document. According to court documents, Hao was required to repay 8,334 LTC in four installments by October 15, 2015.

However, citing regulations issued by the Bank of China and other relevant departments which state that virtual currency is not protected by the law — Hao argued that the lower court erred when it ruled in favor of Wenjie. In addition, Hao tried to cast his loan agreement with Wenjie as a “financing behaviour prohibited by the law’ and therefore it should not be protected by the law.

‘LTC Is a Network’

Nevertheless, in rejecting Hao’s assertions, the Chinese intermediate court insisted that the regulations cited by the defendant are merely “regulatory opinions” and that these in no way diminish his obligations.

Concerning the cryptocurrency, the court determined that while LTC is a “network currency” it still lacks key properties of a currency such as “legal compensation and compulsion.” The cryptocurrency, however, has the characteristics of virtual property and according to the court, Wenjie is entitled to rights that come from possessing such property.

“The court held that litecoin has the properties of virtual property and virtual goods … Zhai Wenjie can enjoy the corresponding property rights and the basis of the property right claim,” the court document states.

Accordingly, an intermediate court declared that the court’s decision would not be overturned and ordered that Hao return 33,000 LTC to Wenjie. Bitcoin.com News covered a related story from China that involved bitcoin in May.

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Terence Zimwara

Terence Zimwara, a Zimbabwean journalist, writer and author who has been awarded the Zimbabwe Booker Prize. He is a prolific writer on the economic woes of African countries, as well as digital currencies that can be used to provide an escape path for Africans.