Chinese Court Affirms Bitcoin as Virtual Property with Value
The first property dispute case on Bitcoin finalized trial in a local Chinese court. The court confirmed the “virtual property” attribute of Bitcoin, recognized it as a virtual property with value. The court rejected the plaintiff’s claim because he could not offer any evidence of buying the bitcoins.
In the country’s first bitcoin infringement lawsuit, the Hangzhou Internet Court pointed out that the cryptocurrency meets the virtual property requirements because it has value, is scarce and disposable.
On May 22nd, the Hangzhou Internet Court opened a public hearing through the online litigation platform to judge a case of bitcoin property transaction. The plaintiff Mr.Wu accused the defendants, FXBTC and Taobao of refusing paying for bitcoin he ordered years ago. He bought 2,675 bitcoins on a website called FXBTC via a link provided by e-commerce platform Taobao and kept them in a bitcoin wallet on the website. In May 2017, he found the site had closed in 2014 and so could not recover his bitcoins. He demanded that FXBTC’s operator and Taobao jointly pay him CNY76,314 (USD11,000) in compensation.
Mr.Wu was originally seeking compensation of $11,000 USD for the loss of 2,675 bitcoin- a quantity that would carry a much higher value in today’s market. The plaintiff Mr.Wu complained that he was not warned of the exchange’s impending shutdown and thus did not withdraw funds prior to its closing.
Though the court recognize the bitcoin as virtual property with value, it rejected the plaintiff’s claim because he could not offer any evidence of buying the bitcoins for CNY19,920 in 2013 or any certificates on the rights and obligations of both parties to the transaction.
The court explained that Chinese law provides for a three-year statute of limitations in general civil cases, so residents should raise their awareness of risk prevention and take immediate action to protect themselves as soon as they know their rights have been violated, so as to avoid situations that exceed the statute.
The court’s statement that Bitcoin is a commodity of value sets an important legal precedent. This is a clear signal that Chinese financial authorities are starting to loosen control over digital currency and virtual currency.