Recently, a Chinese District Court declared that Ethereum was legal property and it holds economic value. The ruling is one in several court rulings in China around the legality of crypto. While crypto is not recognized as legal tender in the country, people are allowed to hold them and transfer them like property.
The Court Ruling
According to a ruling in the Shenzhen Futian District People’s Court, Guangdong Province, ETH is legal property and it is protected under Chinese law. The news was first reported in a local media report. The ruling was made in connection to a theft case involving stolen crypto.
In the case, a blockchain engineer named Li had worked at a firm known as Shenzhen Xinyijia Technology Co. Ltd. He started working at the company in March 2019. During his time working there, he was taking part in a project named Haode Star, which was a collaborative effort between his employer and Shenzhen Haode Trade Co. Ltd, who was the plaintiff. Li was in charge of the private key and password for the project.
However, on May 31, he left his position after his employer determined that he was not a fit employee. Li was unhappy with his firing. He decided to use the private key and password he possessed to log into the Haode Trade’s account at the Imtoken crypto exchange on June 20, 2019. Li stole 4 million Haode coins and 3 ETH. Later on, he logged into the account on July 15, 2019, and stole 0.4 ETH. The defendant moved the crypto to his accounts at the Okex and Imtoken crypto exchanges.
According to the lawsuit, the ETH stolen by Li was worth around $846. Li agreed to return all the stolen Haode coins of unknown value since they had not been publicly listed and the stolen ETH. Besides that, he will serve a 7-month jail sentence and he will have to pay a 2000-Yuan fine.
It is not the first time the Chinese judicial system has ruled that crypto is property. In another case at the Shenzhen Court of International Arbitration, the court ruled to protect an “equity transfer agreement” that involved BCH, BTC, and Bitcoin Diamond. In 2018, the Shanghai Hongkou District Court also ruled that ETH was property and enjoyed legal protection under Chinese law. While crypto is not recognized as legal tender in China, the court ruled that it could not deny the fact that ETH should enjoy legal protection under Chinese law as general property.
For those seeking to invest in the crypto sector of China, this ruling will no doubt be a positive one. As far as it is known, it also marks the first time that a person has been jailed in China for stealing crypto. It will no doubt embolden more companies to invest in the sector, with the knowledge that their crypto assets enjoy the full protection of the law. The ruling comes at a time when China has taken concrete measures to launch its national digital currency.
Image Source: Pixabay