Chinese court rules Bitcoin is a commodity but warns crypto-related activities are illegal
Cryptocurrencies are considered commodities in China and are not explicitly banned by law, according to commercial judge Sun Jie at the Songjiang District People's Court in Shanghai.
However, crypto activities—such as trading, issuance, or payment—are considered illegal financial activities.
Sun's statement was posted on the official WeChat channel of the Songjiang Court to provide legal guidance on cryptocurrencies during the market frenzy, which she called a new "gold rush".
The judge commented on a case from the 2017 crypto "gold rush", in which the defendant had provided Token issuance guidance services to the plaintiff for a fee of 300,000 yuan (around $44,000 at the time). The defendant had drafted an official document but did not assist in the Token issuance process, claiming it was the plaintiff's responsibility.
Sun ruled that the agreement between the two parties was void because the crypto-related services in the contract were considered illegal financial activities. However, she said that while commercial organizations are not allowed to issue Tokens or engage in trading, "it is not illegal for individuals to simply hold Cryptocurrencies."
The Shanghai court's interpretation aligns with a recent case at the Jiahua District People's Court in Hunan province, central-southern China.
According to state-owned media outlet Rednet on November 21, the court recently dismissed a plaintiff's claim to recover $6.27 million in USDT.
The dispute stemmed from a November 2021 WeChat agreement, in which the plaintiff had paid $23.67 million in USDT for crypto mining equipment, but differences between the parties had arisen over time.
The court ruled that cryptocurrencies like Bitcoin, Ether, and USDT are not legal tender and cannot be used as currency. The agreement to exchange crypto mining equipment for USDT was considered void, and the court dismissed the plaintiff's claim as it was not within the legal protection under Chinese law.
The election victory of Donald Trump, the elected President of the United States, has prompted experts to suggest that China may relax its strict stance on cryptocurrencies.
Throughout the year, social media discussions have fueled rumors that China will reverse the crypto ban, but Beijing has not officially provided any clear indication that they will do so. However, restrictions have been eased in Hong Kong.
Governments eye crypto tax opportunities as Bitcoin hits new highs
The price surge of Bitcoin towards $100,000 since Trump's election victory is driving discussions about crypto taxation in East Asian countries.
In South Korea, the opposition Democratic Party has pushed to start taxing crypto gains from January 1, 2025, while also raising the tax threshold from 2.5 million won (around $1,800) to 50 million won (around $36,000).
South Korea's planned 20% tax on crypto gains has faced multiple delays. Initially expected to be implemented in 2021, strong public backlash pushed it back to 2023, and then further to 2025. Earlier this year, the ruling party proposed delaying crypto taxation until 2028.
In Taiwan, Finance Minister Chang Sheng-ford has pledged to review crypto tax regulations within three months, according to state-owned Central News Agency.
During a legislative hearing on November 18, Taiwan officials were reported to have said the country has not effectively taxed traders profiting from the booming crypto market. Kuomintang legislators Lai Shyh-bao and Tung Hsiu-lin, the director of the Tax Administration, called for investors to report crypto gains as personal income.
In Taiwan, personal income tax can go up to 40%. However, personal income tax only applies to income generated within Taiwan, opening a potential loophole for profits from overseas exchanges.
Meanwhile, Japan is undertaking a comprehensive stimulus package and tax reform after Prime Minister Ishiba Kishi referenced bipartisan discussions. Expected to be passed by the end of 2024, these reforms mark a policy shift for the ruling party, which previously supported higher taxes. The key plan includes reducing crypto taxes from the current "miscellaneous" rate that can reach up to 55% to a fixed 20%.
AI Voice in the 80,000 Bitcoin Embezzlement Scandal
A major political scandal has erupted in the Indian state of Maharashtra just before the 2024 Council elections.
Former Indian Police Service officer and legal auditor Ravindranath Patil alleged that 80,000 Bit seized in a 2018 cryptocurrency Ponzi fraud investigation were used to fund political campaigns.
Patil claimed to have audio recordings implicating Supriya Sule, a member of parliament from the Nationalist Congress Party, and Nana Patole, the state president of the Indian National Congress.
The Bharatiya Janata Party (BJP), a rival political party, has released what it claims are audio recordings of Sule and Patole discussing the misappropriation of Bit to fund their political campaigns. However, both politicians have denied that the voices in the recordings are theirs, while local media reports suggest the recordings were actually created using AI. Sule and Patole have filed complaints with the cyber police against Patil.
The controversy revolves around the GainBit Ponzi scheme investigated by the Maharashtra police in 2017, in which Patil was the legal auditor. This scheme, led by brothers Amit and Ajay Bharadwaj, defrauded thousands of investors across India by promising huge returns on cryptocurrency investments. The scheme involved 6,600 crore (66 billion rupees or around $1 billion) in Bit, 80,000 units at the time.
In a related case from 2022, Patil and cybersecurity expert Pankaj Ghode were accused of stealing some of the seized Bit.
Patil was arrested in 2022 and released in 2023. Now, he alleges that the seized Bit wallets from 2018 were swapped, the funds sold overseas, and then transferred to Sule and Patole to fund their election campaigns.
Hong Kong Adds 120 Blockchain Companies to Its Business Hub
Hong Kong's government business hub, Cyberport, has added over 120 blockchain companies in the past 16 months.
According to a discussion paper released by the Hong Kong Legislative Council, Cyberport now has a portfolio of 270 blockchain technology companies.
Hong Kong has invested $50 million into Cyberport in its 2023-24 budget.
The city is expected to continue to drive Web3 in the latter half of 2024. Recently, Julia Leung, CEO of the Securities and Futures Commission, said the agency is expected to issue a batch of 11 new cryptocurrency licenses by the end of the year.
So far, the SFC has only approved one license in 2024 for the Hong Kong Virtual Asset Trading Platform, bringing the total number of licensed operators in the city to three.
Another 14 companies are awaiting the agency's decision on their license applications, while 15 have withdrawn or been rejected.
Vitalik Buterin Meets Viral Sensation Moo Deng
It is no longer unusual for cryptocurrency founders to appear on the covers of mainstream websites and magazines.
This week, Vitalik Buterin, co-founder of Ethereum, was the focus of attention on the Facebook page of Thailand's Khao Kheow Open Zoo.
Buterin was spotted with international star Moo Deng, a Hippo Meme living in the zoo.
Moo Deng has gained internet fame for its expressive personality, even inspiring the popular Moo Deng Meme Coin.
Buterin frequently receives unsolicited Meme Coins from community members and has stated that Meme Coins sent to his wallet will be donated to charity.
In October, Buterin donated over $180,000 worth of ETH received as Moo Deng Meme Coin to the Kanro Biotech Charity organization.
