China To Make Crypto Legal Again?

The South China Morning Post reports that Judge Sun Jie, in an article published on the Shanghai High People’s Court’s official WeChat account, stated that while individuals are permitted to hold cryptocurrencies, business entities are restricted from engaging in cryptocurrency investments or token issuances without proper authorization.

This clarification emerged from a case review involving disputes between two companies over an initial coin offering (ICO), which is considered illicit financing in China. Judge Sun emphasized that cryptocurrencies, as virtual commodities with property attributes, are legally permissible for personal ownership. However, he cautioned that business activities involving cryptocurrencies could disrupt economic and financial order or facilitate illegal transactions, justifying stringent regulations against speculative trading activities.

China’s regulatory stance on cryptocurrencies has been stringent. In 2017, Beijing banned ICOs and shut down crypto exchanges. The crackdown intensified in 2021 with a ban on Bitcoin mining and a declaration that crypto-related business activities were illegal.

This judicial opinion provides explicit legal clarity for individual crypto holders in China, affirming their right to own digital assets while reinforcing the prohibition on unauthorized corporate involvement in the crypto sector.