Crypto Trading Isn't Protected by Law, Shandong Province High Court Says

The ruling contradicts that of a court in Shanghai last week.

Aug 23, 2021 at 10:44 a.m. UTC
Updated Sep 14, 2021 at 1:43 p.m. UTC

Investing in crypto is not protected by Chinese law, the high court of Shandong province said in a ruling yesterday on a contract dispute case that dates back to 2017. The ruling contradicts one from a Shanghai court last week.

  • The case could set a legal precedent for crypto trading in the country, an activity that is already under intense pressure.
  • Other courts in China have taken a different stance, ruling that digital assets are protected as virtual property or commodities.
  • A court in more financially liberalized Shanghai said last week that crypto is protected as virtual property, and China's Supreme Court last year called for increased protections for virtual currencies.
  • In the Shandong case, the plaintiff, identified as Ma, entrusted the three defendants with 70,000 yuan (US$10,500 at the time) to invest in tokens in 2017. Soon after, Chinese authorities banned crypto trading using the yuan, and Ma's money was locked in the trading account.
  • The Shandong high court said that notices from the People's Bank of China, as well as the securities, banking, cyberspace and other regulators had clearly said at the time that investing in crypto tokens is illegal. Under China's civil law, the plaintiff was breaching the law and thus couldn't get his money back from the defendants.
  • Echoing lower court rulings, the Shandong court said that crypto is not a legal currency issued by an authorized monetary authority, so it doesn't have the legal status of other currencies.


Read more about
The Festival for the Decentralized World
Thursday - Sunday, June 9-12, 2022
Austin, Texas
Save a Seat Now

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Trending

1
CoinDesk - Unknown
Sequoia's Guide to Surviving the 2022 Bear Market

Venture capitalists have gotten increasingly frantic over the last few months.

Venture capitalists have gotten increasingly frantic over the last few months.

CoinDesk - Unknown
2
CoinDesk - Unknown
NFT Art Museums Are a Good Idea

The metaverse turns galleries global, and helps fund the arts. This article is part of “Metaverse Week."

The metaverse turns galleries global, and helps fund the arts. This article is part of “Metaverse Week."

CoinDesk - Unknown
3
CoinDesk - Unknown
How the US Can Establish Itself as a Crypto Leader

Regulators have an opportunity to map out thoughtful, strategic policy on stablecoins and beyond.

Regulators have an opportunity to map out thoughtful, strategic policy on stablecoins and beyond.

CoinDesk - Unknown
4
CoinDesk - Unknown
No, the UK Is Not Going to Make USDC and USDT Legal Tender

For “legalize” read “regulate.”

For “legalize” read “regulate.”

CoinDesk - Unknown