China, one of the nations that is most hostile to Bitcoin (BTC), has not yet made it illegal to own cryptocurrencies, according to David Lesperance, the founder of the law company Lesperance & Associates.
The Chinese government still defends local cryptocurrency investors despite putting a significant restriction on cryptocurrencies a year ago because bitcoin is viewed as virtual property covered by the law.
Lesperance told a news publishing house that Chinese law provides protection for cryptocurrency owners in the event of theft, misappropriation, or breach of a loan agreement. He highlighted that China continues to forbid cryptocurrency exchanges.
The attorney cited a current legal dispute in China involving the nonpayment of a Litecoin (LTC) loan. A significant judicial precedent involving cryptocurrency in China was set in 2015 when defendant Ding Hao borrowed 50,000 LTC from Zhai Wenjie and failed to repay it all in full.
Despite Ding’s claim that cryptocurrency transactions were formally outlawed by the People’s Bank of China (PBoC) last year, the Beijing No. 1 Intermediate Court found on August 31 that the defendant owed Zhai the remaining sum of Litecoin. The price of Litecoin has increased by almost 1,800% from 2015, when it was only worth about $3.
Despite being generated in the virtual world, the court has ruled that cryptocurrencies like Litecoin are still considered “property.” He underlined that while the case involved a “very ordinary” commercial loan issue that was resolved in accordance with standard property law principles, the cryptocurrency community “shouldn’t draw any particular positive inferences” from it.
He added that China has not yet outlawed the possession of cryptocurrencies.
Due to the government’s explicit restriction on cryptocurrency exchanges in China, it does not make the commercial trading of this kind of property legal.
Although Lesperance claims that Chinese authorities have outlawed cryptocurrency exchanges, several local cryptocurrency aficionados are certain that the PBoC has never specifically barred anyone from trading cryptocurrencies.
Since the government declared a systematic crackdown on cryptocurrency in September 2021, the most recent story provides another another piece of evidence that cryptocurrency has not been completely suppressed in China.