Shanghai Court Recognizes Unique Traits of Bitcoin
The Shanghai Second Intermediate People’s Court has added a layer of legitimacy to Bitcoin despite China’s prevailing anti-crypto stance.
In a recently published report, the court recognized digital currencies such as Bitcoin as being unique and non-replicable. It went further still in singling out Bitcoin as being distinct from the thousands of other cryptocurrencies that are currently in existence.
Sun chimes in
The significance of this development has caught the attention of Justin Sun, the Founder of the TRON blockchain network, who took to the X social media platform (formerly Twitter) to share insights from the report. Sun wrote:
”The Second Intermediate People’s Court of Shanghai believes that with the development of internet technology, digital currencies represented by Bitcoin possess uniqueness and non-replicability.”
Legal attributes
Delving deeper into the report’s content, it becomes evident that the court was engaging in a discussion about the legal attributes of Bitcoin and how judicial decisions should be approached in cases involving cryptocurrencies.
One striking aspect of the report is how it acknowledges the usage of cryptocurrencies in illegal financial activities, such as illicit fundraising. In this instance, the court has indirectly acknowledged the financial nature of cryptocurrencies, including Bitcoin, despite the fact that a ban has been in place on trading Bitcoin and other cryptocurrencies since 2021.
That said, the report also notes that due to the regulatory stance on cryptocurrencies, the legal attributes of digital currencies remain ambiguous, creating challenges in their judicial handling. Despite some courts attempting to disregard the “monetary” and “property” attributes of digital currencies, these efforts have proved unsuccessful.
Inherent characteristics
Regarding the monetary attribute, the courts still identify the sale price of digital currencies in their judgments. When it comes to property attributes, these courts struggle to ignore the inherent property value presented by digital currencies during legal proceedings.
While acknowledging Bitcoin’s decentralized nature and lack of centralized control, the article still underscores its “major functions of currency,” such as scalability, circulation, storage, and means of payment, making it a global currency.
Future implications
The legal opinion expressed by the Shanghai court provides a notable boost to the legitimacy of Bitcoin and other digital currencies. It asserts that these tokens undeniably possess value, even if the People’s Bank of China chooses not to formally recognize them.
Moreover, the court’s inclination toward classifying cryptocurrencies as personal property aligns with another report from the Chinese courts as well as rulings in other jurisdictions, such as Singapore. Similarly the Shanghai court acknowledges that Bitcoin can be acquired through various means, including mining, inheritance, and buying and selling.
The court’s recognition of the enduring value of cryptocurrencies echoes the sentiment that value is a collective human judgment. In this respect, the Shanghai court’s perspective aligns with the reality that many Chinese citizens continue to use digital currencies as a medium of exchange despite the existing ban.
The Shanghai court’s unintentional validation of Bitcoin’s unique attributes and value may have broader implications for the legal status and recognition of cryptocurrencies in China and beyond. This latest development could contribute to a more nuanced approach to cryptocurrency regulation and legal interpretation in the future.
