In line a recent case published via the arbitrator’s official WeChat account states that, cryptocurrencies like Bitcoin [BTC] are legally protected as property.The Shenzhen Court of International Arbitrationdirectedin favor ofananonymouscomplainantinanequity transfer dispute,during whichthelitigantdidn’t returned the cryptocurrencies holding in Bitcoin [BTC], Bitcoin Cash (BCH) and Bitcoin Diamond (BCD) as had beenagreed by himin an exceedinglywritten agreement.
In line with the case’soutline, the contract hadlicensedthelitigantto trade and manage the plaintiff’s portfolio of20.13 BTC, 50 BCH, and 12.66 BCD for a stipulated time.Afterthelitigantdidn’treturnedthe cryptocurrencies holding as per the scheduled date, thecomplainantbrought the case before the arbitrator’s, seeking thereturnof his assets with interest.
The defense attempted to an argue that thewritten agreementequity transfer agreement was invalid,outlining that cryptocurrenciesaren’trecognized asmedium of exchangein China,andtheir circulation is subject to severe restrictionswithin thecountry.
Thelitigantcited the central bank’s announcement on PreventingFinancialRisks from ICOs,thatwas passed in earlier in September 2017, stating that ICOs that raise “so-called cryptocurrencies”likeBitcoin [BTC] and Ethereum [ETH] through the irregular sale and circulation of tokens”arepartakingin “unauthorized” publicfinancing,thatis “illegal.”
Thefinancial institution [Central Bank]hadadditionallydetermined that cryptocurrencies “cannotand willnot be circulated noremployed inthe market as currency.”
Thelitigantclaimed that the core “payment and arrangement of the transfer price” clause of the contract wassoin violation of theobligatoryprovisions of Chinese law,thatprohibits the sale and circulation of crypto tokens,along with the tradingplatforms used as a venuefor his/hertransfers and exchange.
The arbitratorbutfound that thewritten agreementobligationunderneathdisputedidn’trepresentthe relevant provisions asmade publicwithin theSept. 2017 prohibition, stating that:
“Thereis not anylaw or regulation thatexpresslyprohibits parties from holding bitcoin orprivate transactions in bitcoin, [only warnings to]the general publicregardingthe investment risks. Thecontractfor this case stipulatesthe requirementto return the bitcoin between2natural persons, anddoesn’tbelong to the [Sept. 2017 ban].”
The arbitratorsoaddedthat the contract waslegallybinded, and:
“Bitcoin hasthe characterof a property,which canbeownedand controlled by parties, andis readyto offereconomic values andadvantages.”
The arbitrator however refuted that restrictions on exchangescauseanobstacle, notingthat non-publiccrypto transfers face no technical difficulties as long aseachparties havea personal walletaddress.
The rulingsoordered thelitigantto uphold hiswritten agreementobligations andreturnthe cryptocurrencies assetunderneathdispute with interest (calculated by the arbitrator as beingpriced at$493,158.40 USD),alongpaying a penalty of $14,400 USD.