China’s ban on crypto does not prohibit Chinese crypto holders from being protected by the law against theft, misappropriation, or breach of loan agreements. The Chinese government has enforced a major cryptocurrency ban since 2011. However, local crypto investors are still protected by it. Crypto is considered virtual property and thus the law protects it.
According to David Lesperance founder of Lesperance & Associates law company, China is one of the most hostile countries towards Bitcoin ( Bitcoin). However, China has not yet prohibited the possession of cryptocurrencies.
China banned most crypto currencies last night
Lesperance explained to Cointelegraph that crypto holders in China are protected under the law against theft, misappropriation, or breach of loan agreements. He stressed that crypto-exchanges in China are still prohibited.
A recent Chinese court case involving a breach in a loan made under the Litecoin ( LTC ) cryptocurrency was referred to by the lawyer. Ding Hao , the defendant, failed to repay all 50,000 LTC he borrowed from Zhai Wenjie back in 2015. This case became a landmark court precedent in China regarding cryptocurrency.
According to CoinGecko data, the price for Litecoin has risen approximately 1,800% since 2015. The cryptocurrency was trading at $37 7 years ago.
The Beijing No. The Beijing No. 1 Intermediate Court ruled the defendant owed Zhai Litecoin. This rejected Ding’s claim that the People’s Bank of China (PBoC ) had officially prohibited crypto transactions last January.
Lesperance stated that cryptocurrencies such as Litecoin were “property” despite being created in the virtual world. He stressed that the crypto community shouldn’t draw any positive inferences from the case, as it was a “very normal” commercial loan dispute. The matter was resolved under normal property law rules.
“To-date, crypto possession in China has not been prohibited. This does not allow for the legal trading of this type property, since the Chinese government has explicitly banned crypto exchanges.
Crypto trading seems to have been prohibited in China
Although Lesperance claims that crypto-exchanges are illegal in China, local crypto enthusiasts believe that trading cryptocurrencies has not been explicitly prohibited by the PBoC.
It is true that China does not want individuals trading crypto. However, this is not being written in any official document,” said a Chinese person who was involved in the crypto industry to Cointelegraph.
According to the source many mainland users have their bank cards frozen when they use them for crypto-over-the-counter transactions. Trusted OTC channels allow for crypto transactions in China.
The person stated that even though crypto trading is legal, it isn’t illegal for us to argue with banks about crypto because they believe everything is illegal.
This latest news is yet another evidence that crypto has not been completely suppressed in China, since September 2021 when the government announced a coordinated crackdown. As previously reported, China has regained its position as the second largest Bitcoin hashrate provider in January 2022.