Bitcoin (BTC/USD), Litecoin (LTC/USD) – Despite the ban, Chinese courts are allowed to trade cryptos – but there is a catch

Despite China’s ban on digital asset services, a Chinese court has ruled that its people can continue trading in cryptocurrencies.

China in particular has already banned cryptocurrency trading, claiming that it poses a risk to the stability of the financial system.

According to a ruling by Beijing’s No. 1 Intermediate People’s Court, interested investors may only trade in cryptocurrencies, which should be viewed as virtual assets rather than a form of legal tender.

The decision was made in a case concerning a Litecoin LTC/USD Loans with a promise to receive interest payments in other digital currencies.

Depending on the individual case, Zhai Wenjie borrowed his friend Zhai Wenjie 50,000 Litecoins in 2015.

Hao denied Wenjie’s claim that he promised to pay 1,000 Litecoins in interest every month.

Currency status for Litecoin

The court recognized the current restriction on cryptocurrency trading in China, but the presiding judge pointed out that Litecoin could not be considered a means of payment.

The cryptocurrency lacks the support of regulatory and financial structures, the judge explained, noting that the digital assets are not issued by a monetary authority.

“According to real administrative regulations and cases, our country denies only the monetary properties of virtual currency and prohibits its circulation as currency, but virtual currency itself is a legally protected virtual property,” the court ruled.

Notably, the court considered Litecoin despite the country’s regulations controlling such assets and the current ban Bitcoin BTC/USD.

The judge ordered the defendant to return Litecoin after finding that the complainant had presented evidence that the defendant had borrowed a cryptocurrency.

Chinese policy regarding cryptos

The ruling is similar to a recent ruling by a Chaoyang-based court that ordered companies not to pay wages tether USDT/USD because of the restriction on the transfer of digital assets.

It is important to note that several Chinese regional courts have issued different rulings on handling and trading digital assets.

For example, the Shanghai Supreme People’s Court has determined that Bitcoin has a “certain economic value” and is protected by domestic law.

Despite the Chinese government’s crackdown on cryptocurrency activities, which includes a ban on all cryptocurrency trading announced in September 2021, the country is particularly strong in its use of centralized services, ranking second overall in PPP-adjusted transaction volume in both total and retail according to recent statistics.

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