With the scope and sanctions of China`s social credit system in 2021, legal and regulatory measures will be clarified. In the case of Feng Mouran vs The Kuda Company (OKCOIN currency bank), the court decided to support the investor`s claim for a cash return. The court found that Feng Mouran`s acquisition of Bitcoin Cash did not violate the provisions of applicable laws and regulations. The company Le Kuda issued Bitcoin money formed by Bitcoin forks to users, and did not violate the « trade without exchange between legal tender and tokens, the `virtual currency`, nor the purchase or sale of tokens or acting as a central counterparty ». « Virtual Currency » cannot provide prizes, information brokers and other services for tokens or « Virtual Currency ». Feng Mouran, as the holder of the « civic interest » of holding Bitcoin at any given time, is entitled to receive an equivalent amount of Bitcoin cash. UPDATE (September 22, 2022): The vice president of the People`s Bank of China announced on September 19 that the Yuan digital testing program will be gradually expanded to all of Guangdong, Sichuan, Hebei and Jiangsu, the provinces where the first four test cities are located. The timeline for expanding the screening program has not yet been announced. The pilot program has already been expanded to a total of 23 cities across China, including the cities of Beijing, Shanghai and Tianjin. In his remarks, the vice president said he hopes all participating institutions and pilot regions will continue their efforts to promote innovation in yuan digital application scenarios, improve the yuan digital ecosystem, and contribute to the development of legal digital currency. Since e-CNY is technically China`s legal tender, it is illegal for any merchant to decline it as a payment option.

However, merchants can decline other payment options such as WeChat Pay or Alipay. In the contractual dispute between Zhongya Smart Digital Technology (Shenzhen) Co., Ltd. and Changsha Shengda Industrial Co., Ltd., the court declared that the validity of the « point comparison agreement » at issue in this case was invalid due to the violation of mandatory legal provisions. Bitcoin enrichment disputes refer to return disputes between investment platforms and investors due to misallocation of Bitcoins. Typical cases include: Li Moufeng and Putao Technology Company`s improper price refund dispute and Xinpaybao and Chen Moufeng company`s improper price refund dispute. When it comes to inappropriate profit return disputes related to Bitcoin, current decisions are more consistent. Although Bitcoin is not legal tender, it does not prevent Bitcoin as a property in the general sense from being legally protected. So as long as there is legal on the basis of return, the courts have all supported the restitution claim. For example, in a dispute between Li Moufeng and Putao Technology Co., Ltd. over the return of undue profits, the court stated whether Putao Technology Co., Ltd. had set up a Bitcoin online trading platform in violation of the relevant regulations.

This does not affect Li Moufeng`s responsibility to return the services concerned due to the lack of a legal basis. Responsibility. In the dispute between Xinpaybao and Chen Moufeng over the restitution of undue profits, the court noted that the country has not recognized the monetary characteristics of so-called « virtual currency » such as ether and prohibited its use as currency for financial activities such as circulation, but it has not challenged ether. It can be protected by law as well as by property in the general legal sense. First, it cannot be regarded as virtual property within the meaning of Article 127 of the general principles of civil law. Virtual goods are not a legal term. The only similar concept in law is virtual property in section 127 of the General Principles of Civil Law. Article 127 of the « General Principles of Civil Law » provides that if the law contains provisions on the protection of data and virtual ownership of the network, these provisions must be followed. However, the « General Principles of Civil Law » do not contain specific provisions on the scope and connotation of virtual property. It simply states that the protection of virtual property must be prescribed by law and that the specific protections of virtual property are entrusted to other laws. Since there is no law regulating Bitcoin in our country, it cannot be recognized as virtual property in the « General Principles of Civil Law ».

Bitcoin mining machine purchase disputes are mainly disputes caused by the purchase of Bitcoin mining machines between individuals. Specific cases include: the dispute over Zhang`s purchase contract and the first domestic dispute over the bitcoin mining machine. When it comes to purchase disputes on Bitcoin mining machines, the current judgments on these disputes are more consistent. The mining machine itself, as a type of commodity, is not prohibited by laws and regulations. Therefore, the purchase of mining machinery is legal and efficient. Mining equipment disputes are synonymous with the resolution of general disputes relating to the sale of goods. In response, several cryptocurrency companies have announced that they will stop providing services to people in China and block Chinese IP addresses. The announcement also affects all Chinese citizens working for cryptocurrency companies overseas, as their roles are now illegal and can be prosecuted. The currency became legal tender in China from 1937.

It was then replaced by the spending of the puppet banks. However, the currency remained in force in Hong Kong between 1941 and 1945. Initially set at HK$2 = JMY1, the Hong Kong dollar was widely favored and hoarded by locals. To remedy this, the Japanese government made it illegal to possess Hong Kong dollars in 1943 and demanded a conversion to JMY at 4 to 1. 2. Illegal transactions are not protected by law and the risk is borne by the user The Shenzhen International Court of Arbitration concluded in the share transfer agreement dispute that the Bitcoin return agreement between individuals does not violate mandatory provisions of laws and regulations and is not considered to be considered invalid. Chinese laws and regulations do not prohibit the private ownership and legal circulation of Bitcoin. Bitcoin can be the object of delivery.

Bitcoin is not legal tender and does not prevent it from being legally protected as property. Bitcoin has property attributes, can be dominated and controlled by humans, has economic value, and can bring economic benefits to parties. That is the unanimous intention of the parties and it does not violate the law. China Briefing is written and produced by Dezan Shira & Associates. The practice supports foreign investors in China and has done so since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen and Hong Kong. Please contact the company for assistance in China at china@dezshira.com. First of all, clarifying Bitcoin`s legal characteristics is a prerequisite for the case. Bitcoin itself is a digital currency, so it can be protected by law as common property. However, due to its inherent shortcomings, it is difficult to be legal tender. As long as the State has not authorised its use as legal tender, its activities as legal tender are not authorised by national law. On September 24, 2021, 10 government agencies, including the People`s Bank of China (PBOC), jointly issued a notice to clarify that the cryptocurrency is not legal tender. In addition, all cryptocurrency transactions in China are considered illegal, including offshore exchanges to provide services to Chinese citizens.

Authorities have said China-based employees of offshore crypto exchanges or companies that provide services to them will be investigated and prosecuted. The Chinese government has also reported that trade in virtual currencies has contributed to the increase in gambling, fraud, money laundering, pyramid schemes and other illegal activities. Therefore, banning cryptocurrency is necessary to maintain social stability and national security. Beijing is also paving the way for state-backed financial competitors. Companies are free to reject commercial payment systems – but since digital RMBs are legal tender, they are legally obliged to accept them. This will allow China`s major banks to issue their own digital wallets, creating a multipolar environment with more competition, a richer range of services, and ultimately greater economic resilience. (3) Bitcoin-related activities prohibited by the state are: Token funding trading platforms are not allowed to engage in the barter transaction between legal tender and tokens or « virtual currencies » and cannot buy or sell tokens or as a central counterparty. « Virtual Currency » may not provide services such as price and information brokers for tokens or « Virtual Currency ».

Financial institutions and non-bank payment institutions may not, directly or indirectly, provide products or services such as account opening, registration, trading, clearing and settlement for the financing of token issuance and « virtual currency » and must not support tokens and related « virtual currencies ». The insurance business may include tokens and « virtual currency » as part of civil liability. (1) Bitcoin is not legal tender. Both the « notice » and the « announcement » indicate that Bitcoin is not a currency, is not issued by the monetary authority, does not have monetary characteristics such as legal compensation and coercion, does not have the same legal status as the currency, and cannot and should not be used as currency in the market.