A court in Shanghai has recently clarified that holding cryptocurrencies privately is not against Chinese law, offering guidance to local crypto investors during a period of unprecedented Bitcoin price increases.
Judge Sun Jie from the Songjiang People’s Court noted in an article shared via WeChat this week that while companies in China cannot “freely” engage in cryptocurrency investments or launch new tokens, it is legal for individuals to possess cryptocurrencies. His statements were part of a legal review stemming from a dispute between two firms about a new coin offering, which raised issues of illegal financing in China.
The Chinese government views cryptocurrencies as a potential risk to financial security, leading to continued restrictions on these assets throughout the mainland and prompting questions about their legality.
Sun emphasized that since virtual currencies possess qualities of property, their ownership is lawful in China. Nonetheless, he pointed out that these rules do not extend to corporate actions which may jeopardize economic stability or be used to facilitate illegal activities.
“Consequently,” Sun stated, “the legal framework has consistently enforced strict measures against speculative trading in virtual currencies.”
The Chinese government initiated its crackdown on new coin issuances back in 2017 and mandated the shutdown of cryptocurrency exchanges. This campaign intensified further in 2021, leading to the ban on bitcoin mining and classifying crypto-related enterprises as illegal.
