Lawyer Says Bitcoin Possession Is Still Legal in China Despite Ban



Despite a massive ban on cryptocurrency a year ago, the Chinese government is still protecting local crypto investors as the cryptocurrency is recognized as virtual property protected by law.

One of the world’s most hostile countries towards Bitcoin (BTC), China has not yet banned cryptocurrency possession, according to David Lesperance, founder of law firm Lesperance & Associates.

Lisperance told Cointelegraph that holders of cryptocurrency in China are protected by law in the event of theft, embezzlement, or breach of the loan agreement. He emphasized that cryptocurrency exchanges are still banned in China.

The lawyer referred to a recent Chinese court case regarding the breach of a loan made in Litecoin (LTC) cryptocurrency. Defendant Ding Hao Failed To repay in full the 50,000 LTC he borrowed from Zhai Wenjie in 2015, which became a major court precedent related to cryptocurrency in China.

Since 2015, Litecoin price has gone up jump Nearly 1800%, the cryptocurrency traded around $3 seven years ago, according to data from CoinGecko.

On August 31, Beijing’s No. 1 Intermediate Court ruled that the defendant owed Zhai the remaining amount of Litecoin, rejecting Ding’s argument that the People’s Bank of China (PBoC) Officially Prohibited Crypto Transactions last year.

“The court upheld that cryptocurrencies like Litecoin are ‘proprietary’ even though they were created in the virtual world,” Lisbrance said. He stressed that the crypto community “should not draw any particular positive conclusions” from the case as it was a “very ordinary” business loan dispute that was settled under normal property law rules, stating that:

So far, the possession of cryptocurrencies has not been banned in China. […] It does not make commercial trading of this type of real estate legal, as the government has specifically banned cryptocurrency exchanges in China.”

While Lesperance says cryptocurrency exchanges are banned in China, some local crypto enthusiasts are confident that the PBoC has never explicitly banned individuals from trading cryptocurrency.

“It is true that China does not want people to trade cryptocurrency. A person connected to the crypto industry in China told Cointelegraph that this is never written into any official document.

Related: Chinese Mining Giant Canaan Doubles Its Profits Despite Comprehensive Cryptocurrency Ban

According to the source, many mainland users are seeing their bank cards frozen if they use them for over-the-counter (OTC) crypto transactions. However, trusted OTC channels still allow crypto transactions in China.

This person said, “So even though cryptocurrency trading is illegal, we don’t want to waste our time arguing with banks because they clearly think everything about crypto is illegal.”

The latest news provides further evidence that cryptocurrency has not been completely suppressed in China since the government announced a coordinated crackdown on cryptocurrency in September 2021. As previously reported, China has reclaimed its position as a The second largest provider of Bitcoin hashrate As of January 2022.