On 21 November, the Shanghai court has affirmed that individuals in China can legally own cryptocurrencies, marking a significant moment of clarity for crypto holders in the mainland. This comes as Bitcoin reaches record-breaking price levels, reigniting interest in cryptoassets worldwide.

Sun Jie, a judge at the Shanghai Songjiang People’s Court, stated on the Shanghai High People’s Court’s official WeChat account:

It is not illegal for individuals to hold cryptocurrency.

However, Sun emphasized that Chinese businesses are strictly barred from participating in cryptocurrency investments or issuing tokens without approval.

This ruling arose from a lawsuit involving disputes over an initial coin offering (ICO), which Beijing deems illicit financing. Despite the acknowledgment of crypto as a legal personal asset, the ruling reinforced China’s hardline stance against using digital currencies for commercial purposes.

Cryptocurrency as Property, But Not Currency

The Shanghai High Court’s recent decisions provide a dual perspective on cryptocurrencies. While recognizing them as virtual commodities with property attributes, the court drew a firm line against their use in business transactions.

Sun Jie elaborated that commercial activities involving cryptocurrencies, such as speculative trading or payment for illegal activities, threaten financial stability. “Laws and regulations always maintain a high-pressure crackdown on speculative activities in cryptocurrency trading,” Sun noted in the opinion.

The ruling aligns with China’s broader crackdown on crypto:

  • 2017: Beijing banned ICOs and ordered crypto exchange closures.
  • 2021: The government escalated restrictions, outlawing Bitcoin mining and declaring all crypto-related businesses illegal.

Crypto Ownership vs. Business Use

China’s regulatory framework appears to walk a fine line. While individuals can own and hold cryptocurrencies, their commercial deployment is seen as a disruptor to economic order. This distinction reflects Beijing’s cautious approach—allowing personal property rights without compromising its grip on financial stability.

The recent opinion also highlights the enduring risks of crypto fraud. A Shanghai court recently ruled against two companies in a fraudulent token launch case, reinforcing the inherent dangers of unregulated crypto investments.

Global Implications and Shifting Paradigms

China’s stance contrasts with a global trend of growing acceptance for cryptocurrencies. For example:

  • Hong Kong approved its first Bitcoin ETF this year, potentially opening doors for mainland investors.
  • China advocated for blockchain in cross-border payments at the BRICS Summit, signaling selective support for crypto’s underlying technology.

Meanwhile, global voices like U.S. President-elect Donald Trump have urged adopting Bitcoin to counter China’s economic influence, and Tron founder Justin Sun has called on China to embrace crypto to maintain a technological edge.

While recent rulings acknowledge cryptocurrencies as commodities with legal protection for personal ownership, China’s overarching stance remains unyielding. Commercial use of crypto is deemed a financial risk, with speculative trading and token issuance outlawed.

The message is clear: owning Bitcoin may be within the law, but using it for business is a step too far. As Bitcoin’s price climbs and global interest surges, China’s cautious policies continue to set it apart from the broader crypto landscape.

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