The Shanghai Supreme People’s Court has issued a document stating that bitcoin is subject to property rights laws and regulations. This finding was made in connection with a lawsuit filed in district court in October 2020 seeking recovery of a 1 Bitcoin (BTC) loan. The lower court recognized bitcoin as valuable, scarce and available and therefore subject to property rights and meeting the definition of virtual property.
According to the Sina website, the Shanghai Baoshan District People’s Court ruled in favor of plaintiff Cheng Mou and ordered defendant Shi Moumou to return the bitcoin. When the defendant failed to do so, the case was remanded to the court, which held an arbitration in May 2021. Since the Defendant was no longer in possession of the Bitcoin, the parties agreed that the Defendant would provide compensation at a discount to the value of the Bitcoin at the time of the loan.
No current value could be determined for the borrowed Bitcoin because trading is prohibited in China. The case has also been complicated by the limitations on judicial investigative and law enforcement agencies, who cannot investigate virtual property, according to the publication.
China began cracking down on cryptocurrency trading in 2017 and stepped up efforts. The government continued to phase out cryptocurrency miners from the power grid and KV-vs-crypto markets. She has since turned her attention to “illegal financial activities related to NFT.”
At the same time, China has taken the global lead in launching a central bank digital currency (CBDC). The digital yuan was first used at the Beijing Winter Olympics, despite Covid restrictions.