The Shenzhen International Court of Arbitration recently issued a ruling saying there is no ban on ownership and transfer of Bitcoin in China. Despite of the ban on ICOs and the marketing of cryptocurrencies, Bitcoin and other crypto-coins are legally considered property in the country.
Bitcoin in China is protected by Law
The court rendered the ruling in a case filed with a dispute over a contract involving the transfer of cryptocurrencies. According to the details of the case, the plaintiff and the defendant entered into an agreement. The latter individual managed a portfolio of cryptocurrencies on behalf of the former.
According to the court:
“Bitcoin is not a legal currency and does not prevent it from being protected by law as a property. Bitcoin has property attributes that can be dominated and controlled by manpower, have economic value, and can bring economic benefits to the parties. This is the meaning of the parties’ agreement and does not violate the legal provisions. The arbitral tribunal recognizes this.”
Prohibition of ICOs should not disrupt payments in Bitcoin
In response, the court blamed the defendant’s argument that the September ban did not cover the private transfer of Bitcoin and other cryptocurrencies. The arbitrator opined that the defendant did not need external platforms to return assets in virtual currency. But only as long as both parties had portfolios and private keys.
The arbitral tribunal instructed the defendant to pay the plaintiff the amount of US $ 401.780 per breach of contract. As no monetary authority on the ground issues cryptocurrencies, the court did not approve the defendant’s claim for interest.
Bitcoin as property
The Shenzhen court’s ruling bears similarities to one issued by an arbitration court in Moscow earlier this year. The court ruled cryptocurrencies as property. The verdict happened during a bankruptcy case filed by Ilya Tsarkov.
The classification of Bitcoin and other digital currencies as property offers the possibility of tax implications. In Russia, the government also ruled in July that holders of cryptocurrencies will not be placed in a separate tax bracket.