Regulatory change has been the story of the year. Many were hoping that regulatory clarity could bring about institutional investors and could potentially bring cryptocurrencies into mainstream finance. Unfortunately, different regulators had their different take. China, for instance, has considered banning crypto-related activities. It has banned ICOs as well as crypto exchanges.
And a few months ago, China made it difficult for crypto companies to conduct events by banning malls and hotels from hosting crypto-related events.
However, there is a silver lining to all of this. China is still quite open-minded about blockchain. In fact, it is speculated that China is going to have its own cryptocurrency similar to what Iran and Venezuela did. And now, the members of Shenzhen Court of International Arbitration moderated a case pertaining to cryptos and ruled in its favor.
No Ban on Bitcoin
A case was brought before the court with a dispute over a contract that involved the transfer of cryptocurrencies. Based on the details, both parties agreed where the defendant manage a crypto portfolio on behalf of the plaintiff.
The crypto portfolio involved 20 Bitcoin, 50 Bitcoin Cash, and 13 Bitcoin Diamond with a total value of around $490,000. The plaintiff accused the defendant of abandoning the deal. On the other hand, the defendant mentioned that the ban by regulators meant that cryptocurrencies are illegal making the contract invalid.
The court verdict has indicated that Chinese law has permitted people in transacting with their own Bitcoin. It has ruled Bitcoin as a “property” and even acknowledged its “economic value”. This is a shock to many. According to the lawyers that were overseeing the case, Bitcoin “can bring economic benefits to parties”. And for this reason, it shouldn’t be invalidated.
In addition to this, the court clarified that the September ban on ICO did not cover the private transfer of digital currencies. According to the court, the defendant wouldn’t need an external platform in order to return the digital currencies, since all you need is the private keys.
However, keep in mind that the case happened in Shenzhen which is China’s special economic zone. This means that the results may not actually be the same if it was done elsewhere.
Can This Change Regulators’ Opinion?
Now that the Shenzhen court made this decision, could this change how regulators view cryptocurrencies? Can this be a landmark court decision that can change the crypto market in China in the first place?
China has been concerned regarding the possibility of capital flight considering the volatility of cryptocurrencies. In 2017, Bitcoin started at around $1,000 only to reach an all-time high of near $20,000. However, things aren’t looking good for Bitcoin. It has floated around $6,500 recently. However, it has also shown signs of maturity since its volatility has declined significantly. It has been said to be less volatile these days than Netflix and Amazon stocks.
Most likely, it isn’t going to drive adoption of Bitcoin in China. However, this only means that the fight is far from over in China. There is still hope for those who believe that China will one day ease up on cryptocurrencies.