In spite of China’s prohibition on digital asset services, a Chinese court has determined that cryptocurrency trading is still permissible. Notably, China has prohibited cryptocurrency trading, stating a danger to the stability of the financial system.
After hearing arguments, the Beijing Number One Intermediate People’s Court concluded that cryptocurrency trading should be limited to interested investors and that cryptocurrencies should be seen as virtual assets rather than a currency.
The case included a Litecoin (LTC) loan with the promise of digital currency interest payment, and the judgement was rendered in that context.
The judge ruling the case recognized China’s current restriction on cryptocurrency trade but said Litecoin did not qualify as money. The court has ruled that the cryptocurrency lacks the support of established legal and financial systems and that it is not produced by a central monetary authority.
“According to genuine administrative rules and instances, our nation simply rejects the monetary properties of virtual money and forbids its circulation as currency,” the court declared.
Intriguingly, the court recognized Litecoin despite the current restriction on Bitcoin (BTC), noting that the nation has rules controlling such commodities.
The court dismissed the case because there are no regulations preventing the view of Litecoin as a criminal asset. Accordingly, the court sided with the applicant and ordered the defendant to restore the cryptocurrency Litecoin.
It’s important to keep in mind that various Chinese regional courts have reached different conclusions on the purchase, sale, and management of virtual currencies.
Intriguingly, despite the prohibition on crypto services, fresh data suggests that a greater number of Chinese citizens continue to trade in various assets. According to Finbold, China currently ranks tenth internationally in terms of cryptocurrency use.
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