According to China’s Shanghai Second Intermediate People’s Court, Bitcoin (BTC) is distinguished from other virtual currencies by a number of factors, notably its scarcity.
In a paper titled “Legal Attributes and Judicial Disposal of Digital Currency” released on September 25th, the court highlighted the debate around the use of digital data and currency in legal procedures and the distribution of justice when compared to more conventional assets.
The paper states that Bitcoin is unlike any other cryptocurrency and cannot be replicated.
Bitcoin’s scarcity, inherent worth to holders, ease of circulation, and storage all played a role in the court’s judgment.
After the Chinese government imposed a complete ban in 2021, observers have remarked that decisions like these from Chinese courts provide a dilemma.
Chinese courts have repeatedly recognized Bitcoin as property due to its value and various use cases throughout the years.
In a report on the legitimacy of digital assets released this month, a People’s Court in China emphasized that, despite widespread misconceptions, digital assets remain legally protected property.
Because of the unique characteristics of virtual assets, the court also provided guidance on how to conduct criminal and civil procedures. Because of the inability to seize funds in certain criminal and civil proceedings, it was recommended that these types of cases be heard and prosecuted independently.
Although mainland China remains resistant to private cryptocurrencies, the above judgement from a court in Shanghai comes at a time when the region is experimenting with crypto assets and web3.
Bitcoin and Justice
The court was quoted as saying that different courts have reached different conclusions on the law when it comes to cryptocurrencies because of their unique nature.
The court cited two cases to illustrate the disagreement. The first case involved the theft of 12 million yuan worth of Tether, which was then sold for a profit of 900,000. The value of the stolen property was established by the courts as the total amount of theft.
In the second case, the accused was found guilty of accessing computer data illegally rather than Bitcoin theft. Examples like these were used throughout the report to illustrate the unique characteristics of digital assets and the challenges that courts must overcome.
The report identifies the processes of seizure and transfer as two of the primary challenges encountered by courts. Traditional assets and tangible property are easy to take, but digital assets are sometimes more of a bilateral procedure because the defendant must hand up the key.
Analysts have speculated that current activity surrounding web3 in Shanghai could serve as a trial run for web3 initiatives in the rest of mainland China.