Sa Xiao, Council Member at the Bank of China Law Research Association, was reported as saying that holding Bitcoin in China is still legal. Xiao added that in addition to that, trading Bitcoin amongst individuals remains legal in the country.
Holding Bitcoin Is Still Legal in China
China has been one of the strictest countries for cryptocurrency enthusiasts due to the ban imposed on some crypto activities in the country. However, it is still legal to own Bitcoin in the country, according to a Council Member at the Bank of China Law Research Association.
In a report by The Beijing News, Xiao was cited as saying that owning Bitcoin is legal in the Asian country. While cryptocurrency exchanges have been banned from operating in the country, people can still transfer Bitcoin amongst themselves, Xiao added.
According to the current framework in place, people have the right to possess virtual properties, Bitcoin included. Also, occasional P2P trading of Bitcoin is in nature a “disposition right,” one of the rights of “ownership.” Therefore owning & occasional P2P trading is legal in the country.
In its report, The Beijing News mentioned a case where over a hundred people were scammed of more than 7,000 BTC. The scammer claimed that they would borrow users’ BTC to arbitrage between exchanges and distribute profits to the users afterward. However, the scammers ran off after the users’ last large deposit.
While talking about this, Xiao stated that anyone who runs a Bitcoin trading business and causes significant customer losses with severe consequences, then there is a chance the person could get punished according to criminal law (225#4 Other illegal business practices that severely disrupt market order).
2/ Xiao also believes if one runs BTC trading as a business and has caused significant customer losses w/ serious consequences, the possibility of punishment according to criminal law (225#4 Other illegal business practices that seriously disrupt market order) cannot be ruled out
— cnLedger (@cnLedger) May 22, 2019
The Chinese Government Still Clamping Down on Cryptos
China’s stance on cryptocurrencies remains harsh despite regulatory efforts by other leading nations around the world. Last month, Blokt reported that the Chinese government is considering banning cryptocurrency mining activities in the country. The National Development and Reform Commission (NDRC), which is the top economic body in the country, recommends that the government should shut down crypto mining facilities in China.
According to the NDRC, cryptocurrency mining is a waste of resources (energy), pollutes the environment, and it is classified as an activity that does not contribute to the overall growth of the country. If the government follows the recommendation of the NDRC, then cryptocurrency mining would join ICOs and crypto trading as illegal activities to carry out in China.
The government of Beijing’s Chaoyang district also banned commercial venues in the region from hosting cryptocurrency-related events. At this point, it is unclear if China will reverse its position on cryptocurrencies anytime soon. The country is no longer the leading cryptocurrency trading region in the world, a position it had occupied prior to the ICO and cryptocurrency trading bans.