The Legal Status of Cryptocurrencies in China: A Recent Court Ruling
A recent ruling by the Shanghai Songjiang People’s Court has clarified that owning cryptocurrencies is not illegal in China.
The judgment on Nov. 18 established that digital assets have “property attributes” under Chinese law. However, their use is strictly limited to personal ownership and as commodities, not as legal tender or investment tools.
Judge Sun Jie delivered this clarification while handling a case involving two companies disputing an initial coin offering—an activity deemed illegal in China.
Judge Sun explained that Chinese law does not explicitly prohibit holding cryptocurrencies. However, regulatory provisions from the People’s Bank of China and other authorities strictly control crypto-related business activities.
She noted that virtual currencies lack the legal status of official tender but hold property value as virtual commodities.
The Judge furthered that individuals can legally possess cryptocurrencies, but businesses face significant restrictions because they are prohibited from engaging in crypto investments, trading, or token issuance.
She wrote:
“Although it is not illegal for an individual to simply hold virtual currency, commercial entities cannot participate in virtual currency investment transactions or even issue tokens on their own at will.”
Crypto Community Response
The crypto community has responded positively to this development. Many see it as a potential softening of China’s historically rigid stance on Bitcoin and other cryptocurrencies.
Bitcoin advocate Max Keiser interpreted the ruling as a significant shift, suggesting that China is beginning to recognize Bitcoin’s growing influence.
Meanwhile, Eliézer Ndinga, VP at 21Shares, clarified that the legal position remains unchanged. Individuals could always hold cryptocurrencies in China, but commercial crypto-related activities have long been banned. He stated:
“[China has] nothing like the Executive Order 6102, which forbid holding gold in 1933 in the US.”
Although China continues to view cryptocurrencies as a threat to financial stability, subtle developments like Nano Labs—a China-based crypto mining chip company—accepting Bitcoin payments have sparked speculation about a gradual shift.
These developments come as Bitcoin’s value continues its upward trend, fueled partly by Donald Trump’s recent election victory. According to CryptoSlate’s data, the top asset is trading above $97,000 as of press time.