Chinese court recognizes virtual assets as legally protected properties, according to reports.

People’s courts in China wield judicial authority autonomously and are not influenced by any administrative or public entities. These courts adjudicate criminal, civil, administrative, and economic dispute cases.

The report titled "Identification of the Property Attributes of Virtual Currency and Disposal of Property Involved in the Case" recognized that virtual assets possess economic characteristics and can therefore be categorized as property, as reported by a local daily. While China has classified all foreign digital assets as illegal through a comprehensive ban, the report contended that virtual assets owned by individuals should be regarded as legal and safeguarded by law within the existing policy framework.

The report further provided recommendations for addressing crimes related to virtual assets and indicated that since the funds and property involved in such cases cannot be seized, they should be governed by a unified approach to criminal and civil law. These cases ought to be handled distinctly to ensure a balanced protection of individual property rights alongside social and public interests.

China has enacted a comprehensive prohibition on all cryptocurrency-related activities and has barred foreign crypto exchanges from providing services to customers in mainland China. Nevertheless, despite a stringent national policy regarding virtual assets, Chinese courts have maintained a divergent perspective on Bitcoin and other digital assets over the years.

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The first instance of this divergence occurred in September 2022, when a lawyer asserted that crypto holders in China are legally protected in cases of theft, misappropriation, or violation of a loan agreement, despite the crypto ban. Subsequently, in May 2022, a court in Shanghai confirmed that Bitcoin is recognized as virtual property and is therefore subject to property rights.

China’s adversarial position towards Bitcoin and other cryptocurrencies has been longstanding. However, in recent years, the government appears to have softened its approach. This shift was illustrated by the resurgence of Bitcoin mining in China, which had plummeted to zero following the blanket ban but rebounded to secure the second position within a year. Similarly, Binance

A People’s Court in China released a report regarding the legality of virtual assets, examining the criminal law characteristics of these digital assets. In its report, the court stated that virtual assets, under the current legal policy framework, remain legal property and are protected by law.

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