The tough stance of the Chinese authorities towards the cryptocurrency industry has seen some positive changes in recent months. The digital court of Hangzhou, Zhejiang Province, determined the status of Bitcoin as virtual property.
The resolution confirms that the possession of Bitcoin in China is legal and the owners of cryptocurrency will be protected by the entire legal system of the country.
In 2013, the plaintiff acquired 2,675 BTC for 20,000 yuan ($2,900) on Taobao, a leading Chinese online market, in an online store allegedly owned by the respondent, Shanghai Technology. In 2017, the plaintiff wanted to access the funds and found that the store was closed, and he could not contact the operator to return his Bitcoins.
The plaintiff claims that Shanghai Technology did not notify him about the reorganization of the business, which led to the loss of Bitcoins. However, during the period between the purchase of bitcoins in 2013 and the current lawsuit, the Chinese authorities banned the trade of bitcoins, which could trigger the sudden closure of stores offering cryptocurrency on Taobao.
Despite the recognition of Bitcoin as virtual property, the plaintiff could not prove that the company Shanghai Technology was the owner of the online store, where he acquired Bitcoin. Taobao platform, fulfilling its legal obligations, is also not responsible for the losses of the plaintiff. As a result, the court eventually rejected the claim.
Although the plaintiff lost the case, the Chinese court made an important decision on the status of Bitcoin. Possession of bitcoins in the country has remained legal, and the case completed on July 18 creates a precedent for future legal proceedings.