Cryptocurrencies were in the news again this weekend, as a Shenzhen court unexpectedly ruled in favor of a transaction using bitcoin (BTC), bitcoin cash (BCH) and bitcoin diamond (BCD).
Shenzhen International Arbitration Court, in a review of the case via their WeChat account, outlined a previous court ruling, saying that bitcoin and other cryptocurrencies have so far only been deemed illegal as a means of retail purchase, and that private transactions and ownership of the monetary system cannot actually be termed illegal under Chinese law.
The case in question involved three parties, Applicant A, Applicant B and Respondent C, who disagreed over the legality and technical means of circulating and delivering the cryptocurrency.
The respondent in the case was due to return digital assets BTC, BCH and BCD, which were worth RMB250,000, to Applicant B but claimed that his contract with Applicant A and Applicant B was invalid because of the supposed illegality of bitcoin.
The court decided that there were no technical obstructions to Respondent C returning the money, however, and that the currency could in fact be delivered via private exchanges which do not require the use of illegal trading platforms.
The respondent further claimed that, because there are no legal websites located on the mainland that provide information about bitcoin to Renminbi currency exchange rates, they could not be sure about the exact cost of the transaction. The court also ruled against this and used the popular cryptocurrency website okcoin.com to ascertain a currency exchange rate.
The amount was due to be paid back to Applicant B in December of 2017, when bitcoin rates were booming. As the respondent did not repay the money, and caused loss of earnings to Applicant B, he was charged USD401,780 for non-performance of his contractual obligations, as well as RMB100,000 in damages.
The ruling, taking place in South China's tech hub, comes as something of a shock, given that the Chinese government has refused to recognize bitcoin as a means of legal tender in the market.
We previously reported statements by former head of China’s central bank, Zhou Xiaochuan, who, in 2014, stated “It is out of the question of banning bitcoin as it is not started by [a] central bank … bitcoin is more a kind of tradable and collectible asset, such as stamps rather than a payment currency."
The government has severely cracked down on cryptocurrency exchanges this year, blocking access to 124 offshore exchanges, as well as banning initial coin offerings (ICOs), as reported by NewsBTC.
READ MORE: Will China's Central Bank Ever Accept Bitcoin?
[Cover image via Wikimedia]
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