Landmark Ruling in China Makes Bitcoin an Asset Under the Law

China has designated Bitcoin as an asset

On June 12, 2018, three Chinese men and one Malaysian man, broke into the house of a couple, forcing them to transfer nearly 19 bitcoins and over 6,000 skycoins into an account.

Court hearings eventually discovered that the alleged criminals were trying to make up for an economic dispute in demanding the digital currencies. In an effort to try to save themselves the value they ultimately stole, the defendants tried to argue to a judge that they were not obligated to return bitcoins because at the time, the asset was not considered to be one under Chinese law. The fact that it is now is a step forward for adoption, albeit in an indirect way.

Despite the Shanghai court’s ruling that the digital currencies were to be returned to the rightful owners, the defendants refused to make up for the losses of the victims, forcing the husband-and-wife tandem to file a lawsuit against the thieves.

What The Ruling Means for Chinese Investors

Bitcoin has always been viewed as a safe haven asset, particularly in developing countries whose governments routinely violate the human rights of individuals or maintain excessive control over monetary policies, unlike countries in the Western world who are typically much more liberal and capitalistic in ideology.

That said, the judge presiding over this particular case, Lui Jiang, notes that one of the country’s largest central banks, the People’s Bank of China, has never expressly stated that Bitcoin is not an asset, nor has it ever claimed that Chinese citizens are not allowed to own it. It’s this precedent that Jiang used to make his ruling in the case.

For the average Chinese investor who buys Bitcoin (and many Chinese people do), this all but confirms what they’ve already known. Still, citizens do use digital currencies, just like they use foreign real estate investing, to protect their assets and hide them away from the Chinese government, whether or not central banks or specific monetary policies actually outlaw Bitcoin is somewhat irrelevant in many respects. The point is that many affluent Chinese investors refuse to put their wealth at risk and will find any means they can to protect that wealth.

Other Similar Rulings in China

Believe it or not, regardless of the fact China has a long history of censoring its citizens, the recent ruling in Shanghai is far from the first one to be delivered in courts that liberates digital currencies and deems them to be perfectly legal.

The Shenzhen Court of International Arbitration also stepped up in 2018 in a case involving 20 bitcoins, 50 Bitcoin Cash and 13 Bitcoin Diamond, again ruling that digital currencies are legally sound forms of value.

Another courtroom in Guangdong Province declared Ethereum is also a perfectly legitimate form of digital currency. It seems as more and more criminal cases come out involving the transfer of digital money, even the most stringent governments are forced to make rulings that ultimately provide more wiggle room for cryptocurrencies in society.

What’s the Next Step for Crypto in Countries with Oppressive Governments?

While many governments want to control their people, any legitimate central authority that provides human beings with any rights will ultimately have to protect the possession of assets. In North America, it’s often said that possession is 9/10 of the law, so any human being around the world that has a right to possess anything will ultimately be able to push digital currencies forward in their respective society through common law precedent. The more and more cases come to the forefront, the more governments are actually conceding control and putting it back into the hands of the individual where it belongs.

So the next time you take a gamble with cryptocurrency, remember that while you’re looking to earn a profit and increase the size of your bankroll, many people around the world are taking the same gamble just to get their hands on the freedom that the Western world takes for granted.

Jack Choros byline

Jack Choros

Jack first invested in Bitcoin in 2016 and continues to gamble with it to this day. He loves the Toronto Raptors as much as he loves cryptocurrency. Jack’s work has appeared on ESPN Radio, Yahoo Sports, OddShark.com and many cryptocurrency related publications, namely BTCGG.com.

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