Catenaa, Friday 22, 2024-The Shanghai High Court has ruled that cryptocurrencies possess “property attributes” under Chinese law, affirming their value as virtual commodities.
However, the court also maintained China’s strict prohibition on the commercial use of cryptocurrencies, such as token issuance and speculative trading.
The ruling arose from a legal dispute between an agricultural development firm, referred to as Company X, and an investment management company, identified as Company S.
The conflict dates back to 2017 when Company X sought to issue tokens through a “Blockchain Incubation Agreement” facilitated by Company S. After paying a service fee of 300,000 yuan ($41,000), Company X sued to terminate the contract when the token issuance failed.
The court invalidated the agreement, citing China’s regulations against token issuance, which it classified as an illegal financial activity similar to unlicensed public fundraising.
While both companies were found partially at fault, Company S was ordered to return 250,000 yuan to Company X.
The court clarified that while cryptocurrencies can be legally held as personal property, their business use remains unlawful.
