Crypto Lending Falls Outside China’s Legal System, Says Court
A Chinese court has ruled that crypto lending activities are not within the scope of the country’s legal system. The Nanchang People’s Court stated in a press release that lending out virtual currency and requesting repayment does not fall under civil litigation. The judge clarified that virtual currency is different from digital RMB, the central bank digital currency issued by the Central Bank of China. The court case involved an individual named Mr. Ming who lent USDT to Mr. Gang for stablecoin trading, but Mr. Gang failed to repay the loan. However, since USDT was not considered legally compensable, the court dismissed the lawsuit.
China’s Crypto Ban
In May 2021, China banned Bitcoin mining and later implemented a comprehensive ban on all crypto transactions in September of that year. The ban was imposed due to concerns about economic instability and criminal activity. Despite the ban, China continues to attract significant crypto volume, with $86.4 billion in transactions reported between July 2022 and June 2023 in the region. However, experts argue that such bans have been ineffective or loosely enforced in China.
Hot Take: China’s Strict Stance on Crypto
China’s recent ruling reaffirms its strict stance on cryptocurrency activities. The court’s decision highlights the illegal nature of crypto transactions and their potential harm to national financial order and social public interests. This ruling further reinforces China’s ongoing efforts to regulate and control the crypto industry within its borders. While the country has banned Bitcoin mining and crypto transactions, it continues to be a significant player in global crypto markets. The effectiveness of these bans remains a topic of debate as crypto activities persist despite regulatory measures.
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