The Supreme Court of Shandong Province has ruled that cryptocurrencies “are not protected by law,” a landmark decision that could shake up China’s crypto scene: the ruling relates to a case that involves potential fraud related to the purchase of tokens, as reported by the South China Morning Post.
A Chinese plaintiff invested some RMB 70,000 (USD 10,800) to buy tokens bonded by three acquaintances in 2017. Their accounts were reportedly closed after the People’s Bank of China, the country’s central bank, banned financial institutions and payment companies from providing services related to crypto transactions, the article said.
This latest decision follows a lower court ruling in January 2021 in which a Jinan court said the plaintiff’s allegations of fraud were unwarranted, as the assets in question had no legal protection. The ruling was upheld two months later, after which it was submitted to the provincial high court.
According to the article, the Shandong Supreme Court said in a statement that “investment or trading in cryptocurrencies is not protected by law,” a decision that could deal another blow to China’s crypto industry.
Chinese authorities have taken an increasingly tough stance on the issue. While Bitcoin (BTC) ownership has remained legal in China, the massive crackdown that took place in September 2017 resulted in the banning of crypto exchanges and ICOs (Initial Coin Offering). And in recent months, the government has become increasingly active in rooting out cryptocurrency fraud and cracking down on the mining industry. This has led to a mass exodus of miners to foreign countries.
Last July, the Agricultural Bank of China (ABC), one of the country’s largest commercial banks, announced it would stop cryptocurrency trading and block accounts suspected of engaging in such transactions.
Shandong is home to more than 100 million people and is ranked the third most developed province in China, with a gross domestic product (GDP) of RMB 7.31 trillion ($1.13 trillion) in 2020.