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Chinese court says crypto not protected by law

By Aaron Woolner

06:29, 24 August 2021

Bitcoin squeezed in a vice over Chinese flag
Bitcoin squeezed in a vice over Chinese flag – Photo: Shutterstock

The Supreme Court of the northern Chinese province of Shandong has thrown out a fraud case involving bitcoin on the basis that cryptocurrency is not protected by the local legal system.

A Chinese retail investor handed over $10,800 to three friends to buy crypto assets in 2017.

According to the South China Morning Post (SCMP), however, which first reported the story, the accounts were closed after the Chinese Central Bank in 2018 reiterated its stance that it was forbidden for domestic payment institutions to support cryptocurrency transactions.

Cryptos not legally protected

The investor subsequently took legal action to recover his funds. His case was rejected by lower courts in Shandong before the region’s Supreme Court ruled that “investing or trading cryptocurrency is not protected by law”.

BTC/USD

98,533.85 Price
+0.380% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 106.00

XRP/USD

1.47 Price
-2.100% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 0.01168

ETH/USD

3,430.19 Price
+0.100% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 6.00

XLM/USD

0.58 Price
+15.070% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 0.00216

According to bitcoin.com, the Shandong court ruling contradicts several decisions by other Chinese courts in relation to bitcoin.

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Mining crackdown

A Shanghai court ruled in May 2020 that bitcoin was an asset protected by law. Before that, a district court in the southern city of Shenzhen ruled that ethereum was legal property.

China has recently cracked down on bitcoin mining, resulting in more than 90% of the country’s mining capacity being wiped out.

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Read more: PayPal rolls out cryptocurrency service to UK

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