Bitcoin Gains Recognition As A Unique, Non-Replicable Digital Asset Following Chinese Court Report
The Shanghai Second Intermediate People’s Court in China has explained that Bitcoin (BTC) stands out as a unique virtual asset based on several attributes including its scarce nature.
On Sept. 25, the court published a report “Legal Attributes and Judicial Disposal of Digital Currency” highlighting the controversy in digital data and currency in judicial proceedings and justice delivery when placed side-by-side with traditional assets.
According to the report, Bitcoin stands out when compared to other digital assets as a unique and non-replicable cryptocurrency.
The court reached this decision based on certain attributes of Bitcoin like its scarcity, inherent value to holders, ease of circulation, and storage.
Observers have noted that declarations like these coming out of the Chinese courts create some sort of dilemma following the blanket ban issued by the Chinese government in 2021.
Over the years, courts in China have proffered several arguments in support of Bitcoin as property based on its value and use cases.
This month, a People’s Court in China released a report on the legality of digital assets and pointed out that these assets are still protected by law and, therefore legal property.
🇨🇳 China Court Classifies Digital Assets As Property Despite Blanket Ban By Government— Cryptonews.com (@cryptonews) September 1, 2023
A People’s Court in #China has stated that under the existing legal framework, digital assets have economic value and are still legal property backed by law.https://t.co/BQvMOB57O9
The court also advised on ways to carry out criminal and civil proceedings because of the nature of virtual assets. It stated that in some cases, money involved in criminal and civil cases cannot be confiscated therefore such cases should be tried and prosecuted separately.
The above decision from the court in Shanghai comes at a time when the region is experimenting with crypto assets and web3 with mainland China still opposed to private cryptocurrencies.
Bitcoin and justice dilemma
Per the report, the court explained that the nature of cryptocurrencies has led to several courts interpreting the law differently depending on the price can be ascertained.
In explaining this controversy, the court used two cases. In the first, 12 million yuan worth of Tether was stolen and used to make a profit of 900,000 yuan. The courts determined theft and the amount of stolen goods to be the amount of theft.
In the second case, a defendant was charged with stealing Bitcoin but was convicted for illegally obtaining computer data. The paper utilized these examples to explain the different attributes of digital assets and the difficulties faced by courts.
According to the paper, the main difficulties faced by courts include seizure methods and the transfer process. While seizure is straightforward in traditional assets and physical property, in some cases, virtual assets cannot be seized without the defendant handing over the key making it a bilateral process.
With the recent development around web3 in Shanghai, analysts suggest that it could be a test net for mainland China web3 plans.