Chinese Court Declares Bitcoin and Crypto Ownership Legal

China's High Court has clarified its stance on cryptocurrencies, acknowledging their "property attributes" under Chinese law. This means cryptoassets can be treated as commodities but are not recognized as currency or business instruments. While this recognition offers limited legal protections, the court emphasized that raising funds through token issuance or circulation remains illegal.

The ruling came during a case involving two businesses embroiled in a fraud dispute over a failed token launch. The court condemned their actions, labeling them as illegal public financing. It reaffirmed that no organization or individual is allowed to engage in unauthorized token issuance or fundraising activities, underscoring China's strict regulatory environment.

Despite this firm stance, the court's acknowledgment of crypto as a commodity suggests some legal applications. This view aligns with China's selective support for blockchain technology, particularly in areas like cross-border payments and trade facilitation. At the recent BRICS Summit, China highlighted blockchain's potential in international trade, even using cryptocurrencies for transactions with Russia. Additionally, the digital yuan, China's CBDC, has been integrated into various global trade initiatives.

China's strict crypto policies have sparked global discussions about the country’s position in the rapidly evolving digital asset space. While Hong Kong recently approved its first Bitcoin ETF, offering mainland investors indirect exposure to Bitcoin, China continues to limit broader cryptocurrency usage. Meanwhile, other nations, including the U.S., have considered leveraging Bitcoin to counter China's economic influence.

The High Court’s ruling reflects China's cautious approach to crypto. While acknowledging its value as a commodity, the court reiterated concerns about the risks associated with token launches and business transactions involving cryptocurrencies. It warned that Bitcoin and similar assets could disrupt financial systems and facilitate illegal activities, reinforcing the country's entrenched anti-crypto stance.

Although figures like Tron founder Justin Sun advocate for greater adoption of blockchain technology in China, there are few signs of significant policy shifts. For now, China remains focused on regulating crypto usage, allowing its use only in specific contexts, while maintaining strict control over the broader industry.