Shanghai Court Rules Cryptos Are Commodities

A recent ruling by the Shanghai High Court has recognized that cryptoassets possess “property attributes” and are not outright prohibited by Chinese law. However, this protection only extends to the use of crypto as a commodity, not as a currency or business instrument.

The ruling was made in a case involving fraudulent activities by two businesses relating to a failed token launch, and the Court strongly condemned these actions.

According to a recent WeChat post, the ruling was made during a dispute between an unnamed agricultural development company and an investment management firm, relating to an agreement to issue virtual currency.

The High Court ruled that raising “virtual currencies” such as Bitcoin and Ethereum from investors through illegal issuance and circulation of tokens is a form of illegal public financing without proper approval, and therefore no organization or individual may engage in such activities.

However, the ruling also emphasized that this was not the only purpose of cryptoassets. The Court recognized that they have value as a commodity and there are no prohibitions on this usage.