In a landmark opinion, the Shanghai Songjiang People’s Court has clarified that individuals in China are legally permitted to own cryptocurrencies, despite stringent bans on crypto-related business activities.
The statement, penned by Judge Sun Jie, was published on the Shanghai High People’s Court’s official WeChat account and has brought a new layer of clarity to the ambiguous status of crypto ownership in the country.
A Crypto Ban on Businesses
Sun Jie emphasized that while personal ownership of digital assets is not illegal, Chinese businesses remain prohibited from engaging in cryptocurrency investments or issuing tokens indiscriminately.
The judge’s remarks were part of a case review concerning a lawsuit between two companies involved in an initial coin offering (ICO), which remains categorized as illicit financing under Chinese law.
Balancing Legal Ownership and Regulatory Restrictions
China has historically taken a tough stance on cryptocurrencies, citing concerns over financial stability and systemic risks. The government banned ICOs and shuttered crypto exchanges in 2017, escalating its crackdown in 2021 by outlawing Bitcoin mining and declaring crypto-related business operations illegal.
Despite these stringent measures, individuals have long operated in a legal grey area concerning private ownership of digital assets.
The recent court statement reinforces that holding cryptocurrencies for personal purposes does not violate Chinese law, even as the government maintains its tight grip on crypto industry activities.
Setbacks Amid Global Bitcoin Surge
The news comes at a time when Bitcoin prices have reached historic highs, surging past $97,000 this week. This rally was fueled by global market enthusiasm and the re-election of former U.S. President Donald Trump, who has vowed to adopt pro-crypto policies, including creating a national Bitcoin reserve.
However, China’s crypto advocates faced a setback this week with revelations about Yao Qian, former director of the People’s Bank of China’s digital currency research institute.
Yao was accused of accepting bribes in cryptocurrency, according to the Central Commission for Discipline Inspection of the Communist Party of China. This case highlights lingering concerns about corruption and misuse of digital assets in the country.
Despite regulatory hurdles, experts continue to urge China to reconsider its rigid stance on cryptocurrencies. Zhu Guangyao, former vice-minister of finance, recently emphasized the importance of crypto for the digital economy.
Speaking in September, Zhu remarked that China risks falling behind as other countries, embrace blockchain and cryptocurrency innovations. For now, Beijing appears steadfast in its restrictions.
The latest court opinion, while a win for individual holders, does not signal an easing of broader regulatory policies. However, it underscores a growing recognition of cryptocurrency’s role in the global financial landscape, even within one of its most tightly controlled markets.