Cryptocurrency Trading Is Not Legally Protected, The Shandong Provincial High Court Declares

The high court of Shandong province ruled Wednesday that investing in cryptocurrency is not protected by Chinese law, in a decision on a contract dispute case that goes back to 2017. Last week, a Shanghai court issued a decision that was in direct opposition to this one.

• The case has the potential to establish a legal precedent for crypto trading in the nation, which is already under scrutiny.

• Other Chinese courts, on the other hand, have ruled that digital assets are protected as virtual property or commodities.

• Last week, a court in Shanghai's more financially liberalized district ruled that cryptocurrency is protected as virtual property, while China's Supreme Court advocated for stronger safeguards for virtual currencies last year.

• The plaintiff in the Shandong case, Ma, entrusted the three defendants with 70,000 yuan ($10,500 at the time) to invest in tokens in 2017. Soon after, Chinese authorities outlawed yuan-based crypto trading, and Ma's funds were frozen in the trading account.

• The Shandong high court said that notifications from the People's Bank of China, as well as securities, banking, cyberspace, and other authorities, stated that investment in crypto tokens is unlawful at the time. Because the plaintiff broke the law, he couldn't obtain his money back from the defendants under Chinese civil law.

• The Shandong court agreed with earlier court decisions that crypto is not a legal money issued by a monetary authority and therefore lacks the legal standing of conventional currencies.

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