Cryptocy Clarified to Be Personal Property in China, Remains Barred For Businesses

A recent ruling by the Shanghai Songjiang People’s Court has clarified that owning cryptocurrencies is not illegal in China. The Nov.18 judgment 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 cy, commercial entities cannot participate in virtual cy investment transactions or even issue tokens on their own at will.” 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.