Chinese Arbitration Court Rules That Bitcoin Can be Held And Protected As a Transferrable Property

The Shenzhen Court of International Arbitration in China has ruled that Bitcoin can still be held and protected as a transferable property with economic values. This is big decision considering the fact that the People’s Bank of China (PBoC) introduced an outright ban on cryptocurrencies last year.

The recent ruling came after an economic dispute involving a business contract which relates to the possession and transfer of digital assets. On Thursday, October 25, the Shenzhen Court published the entire case details on its WeChat account.

The case shows that an unnamed plaintiff entering an agreement with the defendant. As per the agreement, the plaintiff allowed the defendant to trade and manage a number of digital currencies. However, the plaintiff told the court that the defendant refused and failed to return the digital currencies as per the earlier agreed deadline. Hence the plaintiff decided to bring the case to the arbitrator to get back the return of his assets along with interest.

The plaintiff told the court that he had a combined crypto investment worth $493,158 comprising of 20 bitcoin, 50 bitcoin cash, and 13 bitcoin diamond. However, the defendant argued in front of the arbitrator saying that the PBoC has introduced a blanket ban on crypto trading and ICOs. This, in turn, means that no crypto payments should be considered legal in China. And thus, the entire contract, by default, would be invalid.

Furthermore, the defendant said that after the PBoC introducing trading ban there are no more venues left to trade and send the assets back to the plaintiff. However, the arbitrator disagreed to the defendants arguments saying that the nature of the case is an contractual obligation of returning back the digital assets. Hence it doesn’t fall under the cryptocurrency trading or ICOs category as outlined in the 2017 September ban by PBoC.

In exact words the arbitrator said: “There is no law or regulation that explicitly prohibits parties from holding bitcoin or private transactions in bitcoin, only warnings to the public about the investment risks. The contract in this case stipulates the obligation to return the bitcoin between two natural persons, and does not belong to the Sept. 2017 ban.”

Hence he further went to conclude that the contracts legally binding while adding that "Bitcoin has the nature of a property, which can be owned and controlled by parties, and is able to provide economic values and benefits.”

Moreover the claims about lack of crypto venues was also refuted by the arbitrator saying that private crypto transfers should face no difficulties provided both the parties have unique wallet addresses.

The outcome of the case ultimately goes to show that even though crypto trading in open markets is a crime in China, holding them as private property is not illegal.