China's Lower Court has Ruled Bitcoin as a "Digital Asset" in one of their Cases

Harlot

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Quote from: hugeblack on May 19, 2020, 10:06:21 AM

Quote from: Harlot on May 19, 2020, 09:00:13 AM

~snip

The point I wanted to make is about whether Bitcoin is legal in China or not? I wanted to make it clear that legal means that it is acceptable as "legal tender^[1]^*" just like all other securities such as the dollar, EUR, and others, and so far Bitcoin is illegal in China.
The court’s decision is to classify Bitcoin as an asset and therefore it is protected by law (since Chinese law protects those assets) and the asset according to the legal definition is anything that has value and is not required to be legal tenders.

There is a big difference between defining digital currencies as Digital Asset and legal tender.

I know that when it comes to Bitcoin being classified as an "asset" like stocks or real estate it will be subject not only to income tax when earned but also capital gains tax when that crypto asset appreciates in value. The argument of the defendants about Bitcoin not being an "asset" is wrong in the first place and what I'm trying to point out is the judge confirming the recognition of BTC as an asset in China which I have highlighted. Also I like to clarify some things like I already know that China has no legal issues with cryptocurrencies aside from big Chinese crypto-related companies dominating their market like Bitmain and Huobi they also have a plan to make their payments digitized and also have one of the big mining pools in the Bitcoin network.

hugeblack

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Quote from: Harlot on May 19, 2020, 09:00:13 AM

Well securities in the first place are assets too so I really don't think they dig deeper into that since the argument of the defendants are about Bitcoin being an asset or not.

The point I wanted to make is about whether Bitcoin is legal in China or not? I wanted to make it clear that legal means that it is acceptable as "legal tender^[1]^*" just like all other securities such as the dollar, EUR, and others, and so far Bitcoin is illegal in China.
The court’s decision is to classify Bitcoin as an asset and therefore it is protected by law (since Chinese law protects those assets) and the asset according to the legal definition is anything that has value and is not required to be legal tenders.

There is a big difference between defining digital currencies as Digital Asset and legal tender.

*

Quote from: https://www.loc.gov/law/help/cryptocurrency/china.php

China does not recognize cryptocurrencies as legal tender and the banking system is not accepting cryptocurrencies or providing relevant services. The government has taken a series of regulatory measures to crack down on activities related to cryptocurrencies for purposes of investor protection and financial risk prevention. Those measures include announcing that initial coin offerings are illegal, restricting the primary business of cryptocurrency trading platforms, and discouraging Bitcoin mining. In the meantime, China’s central bank is reportedly considering issuing its own digital currency.

[1] https://www.loc.gov/law/help/cryptocurrency/china.php

Harlot

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Quote from: hugeblack on May 18, 2020, 07:51:10 AM

I do not think there is anything new and to explain what is happening we must look to define the word "Asset" according to Chinese law:

Quote

An asset is anything with a monetary value attached. Assets may be real or personal property, which may be used for payment of debts. Assets may also include intangibles, such as business good will, trademarks, and rights to market a product

Source ---> http://www.npc.gov.cn/zgrdw/englishnpc/Law/2011-02/15/content_1620615.htm

Therefore, anything that has monetary value must be seen as assets, including Bitcoin.
The real change if the court has dealt with Bitcoin as if it were "securities" that are defined according to the China Securities Regulatory Commission (CSRC).

Thus, the news was not accurate in defining the word "illegal", as according to CSRC, Bitcoin is not considered legal financial papers, but this does not mean that it is completely illegal (It is treated on the basis that it is a "Digital Asset" and therefore the law must protect it..)

Well securities in the first place are assets too so I really don't think they dig deeper into that since the argument of the defendants are about Bitcoin being an asset or not. Securities on the other hand are another type or classification within an asset so if they labeled cryptocurrencies as "Securities in the first place this ruling hasn't change anything with regards to how CSRC defined cryptocurrencies' classification of an asset. However we all know that not all cryptocurrencies acts like securities as we either have utility tokens and security tokens so this might be another topic the Chinese court will be handling if not their departments.

hugeblack

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I do not think there is anything new and to explain what is happening we must look to define the word "Asset" according to Chinese law:

Quote

An asset is anything with a monetary value attached. Assets may be real or personal property, which may be used for payment of debts. Assets may also include intangibles, such as business good will, trademarks, and rights to market a product

Source ---> http://www.npc.gov.cn/zgrdw/englishnpc/Law/2011-02/15/content_1620615.htm

Therefore, anything that has monetary value must be seen as assets, including Bitcoin.
The real change if the court has dealt with Bitcoin as if it were "securities" that are defined according to the China Securities Regulatory Commission (CSRC).

Thus, the news was not accurate in defining the word "illegal", as according to CSRC, Bitcoin is not considered legal financial papers, but this does not mean that it is completely illegal (It is treated on the basis that it is a "Digital Asset" and therefore the law must protect it..)

Harlot

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Quote from: Darker45 on May 15, 2020, 04:02:46 AM

This is confusing news.

1. Whether Bitcoin is an asset or not, or whatever they call it there, is immaterial to the case. Whatever category it is placed under is irrelevant and cannot be a ground for the robbers to simply keep it. They are stealing something and claim that it is not an asset, therefore they can keep it? That sounds absurd.

Not according to the law, if Bitcoin isn't an asset then technically these criminals are put to the stand for nothing as they stole Bitcoin that isn't have any value in terms of being an asset. If the judge agrees to their argument then the criminals would simply keep the Bitcoin and a chance of them being free as well.

Quote from: Darker45 on May 15, 2020, 04:02:46 AM

2. How do they define an asset? Strictly speaking, anything with value which is legally owned by a person is an asset or a property. What if the court would not declare the Bitcoin as an asset? What then is it? And would it not be protected by law?

If Bitcoin isn't identified as an asset like I previously said it will be a thing that doesn't have any value, if this happens even on a lower court like this one this can still have a precedent on other future cases which would be bad for Bitcoin overall in China. It isn't even about the basic definition of what an asset really is as the Judge even stated that Bitcoin was never not classified as an asset and has been recognized as one in a long time now.

Darker45

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This is confusing news.

1. Whether Bitcoin is an asset or not, or whatever they call it there, is immaterial to the case. Whatever category it is placed under is irrelevant and cannot be a ground for the robbers to simply keep it. They are stealing something and claim that it is not an asset, therefore they can keep it? That sounds absurd.

2. How do they define an asset? Strictly speaking, anything with value which is legally owned by a person is an asset or a property. What if the court would not declare the Bitcoin as an asset? What then is it? And would it not be protected by law?

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It is quite and irony to the regulators, 18.88 Bitcoins can be considered as a good amount to start a living.

I bet china will look into the advantage having an asset that will go to the highest level. Just saying.

Harlot

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Quote from: https://www.shine.cn/news/metro/2005077644/

Three Chinese and a Malaysian who locked up an American man and his wife and forced them to transfer 18.88 Bitcoins and 6,466 Skycoins to the gang's bank account have been ordered to return the Bitcoins.

Shanghai No.1 Intermediate People's Court heard that the gang had been sentenced to jail terms ranging from six and a half months to eight months but had refused to return the virtual currency because they believed Bitcoins and Skycoins were not assets in Chinese law.

But the court found Bitcoin to be a digital asset that should be protected by law.

The intermediate people’s court upheld the ruling and made an adjustment regarding the Skycoins.

Liu Jiang, chief judge in the case, said documents released by the People's Bank of China had never denied Bitcoin as an asset and the laws, regulations in China did not prohibit citizens from holding them. However, a notification issued by the bank warns that such "virtual currencies" shouldn't circulate in the Chinese market.

It looks like the Shanghai Court have been caught up with argument of the defendants that Bitcoin is not an "asset", if they argued it isn't then the criminals can keep the stolen Bitcoin but if they rule that Bitcoin is an asset not only will the victims will received their stolen Bitcoin funds back but this decision will set an entire precedent in other future cases involving the argument of Bitcoin being a digital asset, the good thing here is they have chose the latter and it was really the right decision. Also it was a good thing that the chief judge have clarified that Bitcoin wasn't really prohibited in China which I think is an important message to be highlighted since a lot of members here still think that Bitcoin is illegal in China when in fact it hasn't been ever since.

Topic: China's Lower Court has Ruled Bitcoin as a "Digital Asset" in one of their Cases (Read 148 times)