- The Shanghai court confirmed that owning personal cryptocurrency was legal.
- China maintained dominance, controlling more than 50% of the global Bitcoin hash rate amid the regulatory shift.
In a groundbreaking move, a Shanghai court confirmed that personal ownership of cryptocurrencies does not violate Chinese law.
This unexpected clarification provided much-needed legal certainty for crypto holders in mainland China. This marked a shift in the country’s attitude towards digital assets.
Interestingly, this announcement coincided with an extraordinary rise in the value of Bitcoin [BTC] price, which is approaching the $100,000 mark and fueling continued speculation.
Judge Sun Jie makes a ruling
Furthermore, Judge Sun Jie of the Shanghai Songjiang People’s Court recently provided much-needed legal clarity to cryptocurrency holders in mainland China.
In one statement published on the official WeChat account of the Shanghai High People’s Court, Sun confirmed:
“Not Illegal for Individuals to Own Cryptocurrency,”
Despite the continued ban on cryptocurrency transactions imposed in 2021, this ruling provided a significant legal distinction. This emphasized that personal ownership of digital assets does not violate Chinese law, even as legal restrictions on crypto trading remain in place.
That said, Sun highlights the difference between owning and trading cryptocurrencies:
“That is why laws and regulations are always under high pressure to crack down on speculative activities in cryptocurrency trading.”
This clarification was made during a case review regarding a legal dispute between two companies over an ICO, which remains banned in China, alongside cryptocurrency mining.
China’s crypto history
For those who don’t know, the Chinese government imposed a ban on cryptocurrency trading and Bitcoin mining in 2021 after a rise in the price of BTC to $64,000, leading to a market correction that saw Bitcoin fall to $30,000.
Despite this, Chinese citizens continued to own cryptocurrencies and use foreign exchanges to buy and sell.
Many speculate that China’s recent move could be a response to former President Donald Trump’s push to establish the US as a global crypto hub.
However, it is important to note that China’s dominance in the cryptocurrency space remains unquestioned.
China still controls over 50% of the global Bitcoin hash rate and dominates mining operations.
Furthermore, Chinese investors are finding alternative ways to get involved in crypto, raising questions about China’s long-term strategy.
Hence former Vice Minister of Finance Zhu Guangyao’s recent call for the government to reassess its position on cryptocurrencies. This reflected the complexity surrounding China’s position as global trends and policies evolve.
What’s more?
Finally, Eliézer Ndinga, vice president at 21Shares, clarified that the legal position in China has remained consistent.
While individuals have always been allowed to own cryptocurrencies, commercial crypto activities, including trading and mining, have been prohibited for some time.
He said it best when he said:
“[China has] Nothing beats Executive Order 6102, which banned gold ownership in the US in 1933.”