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Chinese Arbitration Body Declares Cryptocurrencies Legally Protected As Property.

In line a recent case published via the arbitrator’s official WeChat account states that, cryptocurrencies like Bitcoin [BTC] are legally protected as property.The Shenzhen Court of International Arbitration directed in favor of an anonymous complainant in an equity transfer dispute, during which the litigant didn’t returned the cryptocurrencies holding in Bitcoin [BTC], Bitcoin Cash (BCH) and Bitcoin Diamond (BCD) as had been agreed by him in an exceedingly written agreement.

In line with the case’s outline, the contract had licensed the litigant to trade and manage the plaintiff’s portfolio of 20.13 BTC, 50 BCH, and 12.66 BCD for a stipulated time. After the litigant didn’t returned the cryptocurrencies holding as per the scheduled date, the complainant brought the case before the arbitrator’s, seeking the return of his assets with interest.

The defense attempted to an argue that the written agreement equity transfer agreement was invalid, outlining that cryptocurrencies aren’t recognized as medium of exchange in China, and their circulation is subject to severe restrictions within the country.

The litigant cited the central bank’s announcement on Preventing Financial Risks from ICOs, that was passed in earlier in September 2017, stating that ICOs that raise “so-called cryptocurrencies” like Bitcoin [BTC] and Ethereum [ETH] through the irregular sale and circulation of tokens” are partaking in “unauthorized” public financingthat is “illegal.”

The financial institution [Central Bank] had additionally determined that cryptocurrencies “cannot and will not be circulated nor employed in the market as currency.”

The litigant claimed that the core “payment and arrangement of the transfer price” clause of the contract was so in violation of the obligatory provisions of Chinese law, that prohibits the sale and circulation of crypto tokens, along with the trading platforms used as a venue for his/her transfers and exchange.

The arbitrator but found that the written agreement obligation underneath dispute didn’t represent the relevant provisions as made public within the Sept. 2017 prohibition, stating that:

“There is not any law or regulation that expressly prohibits parties from holding bitcoin or private transactions in bitcoin, [only warnings to] the general public regarding the investment risks. The contract for this case stipulates the requirement to return the bitcoin between 2 natural persons, and doesn’t belong to the [Sept. 2017 ban].”

The arbitrator so added that the contract was legally binded, and:

“Bitcoin has the character of a property, which can be owned and controlled by parties, and is ready to offer economic values and advantages.”

The arbitrator however refuted that restrictions on exchanges cause an obstacle, noting that non-public crypto transfers face no technical difficulties as long as each parties have a personal wallet address.

The ruling so ordered the litigant to uphold his written agreement obligations and return the cryptocurrencies asset underneath dispute with interest (calculated by the arbitrator as being priced at $493,158.40 USD), along paying a penalty of $14,400 USD. 

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