China Crypto Roundup (May 5- May 11): Bitmain Internal Struggle Escalates, CCTV Talks about Bitcoin Rally ahead of Halving, Shanghai Court Rules Bitcoin a Virtual Asset
While the bitcoin world is preparing for the imminent halving of the block reward, bitcoin mining giant Bitmain’s internal power struggle is escalating into a physical brawl, Chinese national media talked about the latest bitcoin rally, and a Shanghai court ruled that bitcoin is a legal property protected by law.
Internal struggle at Bitmain escalates to physical confrontation
As the entire crypto world is eyeing on the bitcoin halving scheduled for Tuesday, the Beijing-headquartered bitcoin mining giant Bitmain is entangled in an escalated power struggle in the past week, with the ousted co-founder Micree Ketuan Zhan surrounded by dozens of guys led by Bitmain’s CFO Liu Luyao when Zhan was notified by local authority to collect the company’s business license.
According to a video clip circulating on WeChat, the tensions between the two sides later escalated into a physical confrontation. After Zhan reported the incident to the police, both parties were taken to the local police station.
The confrontation marks the latest development in Bitmain’s internal struggle following last year’s sudden coup. Apparently, it will deepen the uncertainties surrounding the firm’s senior management and cast shadow over the performance of the company.
The civil war of Bitmain is launched by cofounder Jihan Wu last October, but the conflicts between the dual CEOs and co-founders have been brewing since 2016 as Wu wants to go long on Bitcoin Cash and Zhan aims to bet big on artificial intelligence (AI). It seems that the internal fight between the two is far from over, as Wu forked a new Bitmain in his hometown Chongqing and allegedly asked all Beijing-based Bitmain employees to resign and sign new contract with the new company in Chongqing.
Chinese national media talks about the latest bitcoin rally
While some are sneering with cynicism at the much-hyped halving event, others are preparing for the halving by stocking up more bitcoins. In such an atmosphere, the price of bitcoin even hit $10,000 a few times this week, before a flash crash on Saturday sent prices dropping by 15%.
In an out-of-character move, China’s top state-owned TV broadcaster, which used to bash cryptocurrencies, published an article about the latest bitcoin rally ahead of the halving.
The Sunday article, posted by China Central Television, said that bitcoin was witnessing a rally in price with the third halving coming around, and believed that the halving would be a positive signal for bitcoin, mentioning that bitcoin went up 8200% after the first halving and up 2200% in the second halving.
Though China may not accept bitcoin-like cryptocurrencies in short term, the country is paying particular attention to cryptos and the underlying blockchain technology of them. Last October, the country’s president Xi Jinping called to accelerate the development and adoption of blockchain. And the country is testing its state-backed digital currency DCEP.
Shanghai court said bitcoin a virtual asset and legally protected by Chinese government
Although China might hate bitcoin, the legal holding of bitcoin is protected by law in the country. A recent lawsuit has proved that.
An international married couple (wife Chinese, husband American) in Shanghai were robbed at their apartment by four people in 2018. The robber forced the couple to transfer 18..88 bitcoins to the attacker’s accounts. And recently the Shanghai Intermediate Court ruled that the accused should return the 18.88 BTC saying that bitcoin is a virtual asset and legally protected by Chinese law.
The court also decided if the accused were unable to return the same cryptocurrency, they should instead return local fiat currency valued at the same price as bitcoin on June 12, 2018. In the previous court hearing in 2018, the accused refused to accept the decision claiming “the current Chinese laws do not recognize the property attributes of bitcoin”. After almost 2 years of fighting in court, the court insists on the ruling and demands that all bitcoins obtained through illegal means should be returned or discounted for compensation.
In the past, similar disputes have occurred in China which hold negative attitudes towards bitcoin-like cryptocurrencies. All of them made the same decision recognizing bitcoin as virtual property.