深圳仲裁确认比特币财产属性受法律保护

In a landmark decision, the Shenzhen Court of International Arbitration (also known as the Shenzhen Arbitration Commission) has ruled that Bitcoin and other digital assets possess property attributes and are protected under Chinese law. This ruling, stemming from a dispute over asset return obligations involving Bitcoin (BTC), Bitcoin Cash (BCH), and Bitcoin Diamond (BCD), has drawn widespread attention for clarifying the legal status of cryptocurrencies in private civil transactions—despite existing regulatory restrictions on trading platforms and initial coin offerings (ICOs).

The case marks one of the first in China to formally recognize the legitimacy of cryptocurrency ownership and contractual obligations related to digital assets, setting a precedent for future disputes in this evolving space.

The Case: A Unique Dispute Involving Digital Assets

At its core, this was a dispute arising from a share transfer agreement. A partnership enterprise ("A") transferred 5% equity in company X to individual C for a total consideration of 550,000 RMB. Of this amount, 250,000 RMB was to be paid directly by C to A.

What made this case distinctive was the involvement of digital assets. A second party, individual B, had entrusted C with managing a portfolio of cryptocurrencies—including BTC, BCH, and BCD. As part of the agreement, B agreed to cover the remaining 300,000 RMB of the equity payment on behalf of C, provided that C fulfilled his obligation to return the specified digital assets in full and on time.

However, C failed to deliver the agreed-upon cryptocurrencies and also defaulted on the direct cash payment. As a result, both A and B filed for arbitration, seeking:

• Transfer of the 5% equity stake to C upon fulfillment of payment obligations
• Payment of 250,000 RMB to A
• Compensation for lost digital assets valued at $493,158.40 (based on market rates), plus interest
• A 100,000 RMB penalty for breach of contract

C admitted to non-performance but challenged the validity of the contract itself, arguing that any transaction involving cryptocurrency violates Chinese financial regulations.

👉 Discover how digital asset disputes are reshaping modern contract law

Is a Cryptocurrency-Based Contract Legally Valid?

C’s primary defense relied on the 2017 Announcement on Preventing Risks Associated with Token Issuance and Financing issued by seven Chinese regulatory bodies, including the People's Bank of China. That document banned ICOs and declared that virtual currencies like Bitcoin do not have legal tender status and cannot be used as currency in market circulation.

C argued that since cryptocurrency transactions are effectively outlawed, any contract using them as consideration must be invalid—especially because the transfer mechanism involved cross-border digital asset movement. He further claimed that:

• Cryptocurrencies cannot be legally traded or circulated in China
• The assets in question were owned by company X, not him
• Both A and B were aware of these facts when signing the agreement

Therefore, he asserted, he should not bear responsibility for failing to complete an impossible transaction.

Arbitration Ruling: Contracts Remain Enforceable

The arbitration tribunal rejected C’s arguments. While acknowledging that Bitcoin is not legal tender and that ICOs are prohibited, it emphasized a crucial distinction: private ownership and transfer of digital assets between individuals are not explicitly banned under Chinese law.

The tribunal noted that the 2017 Announcement was designed to warn investors about financial risks and prevent illegal fundraising—not to criminalize personal crypto holdings or peer-to-peer transfers.

“Private agreements to return Bitcoin do not violate mandatory provisions of laws or regulations and should not be deemed invalid,” the tribunal stated. “Chinese law does not prohibit private possession or lawful circulation of Bitcoin.”

Furthermore, the contract reflected the genuine intent of all parties and did not involve public issuance, fundraising, or financial fraud—key elements of prohibited activities under the 2017 rules.

Thus, the tribunal upheld the validity of the share transfer agreement, affirming that C had breached his contractual duties.

Can Bitcoin Be Legally Delivered?

Another central issue was whether Bitcoin could even be “delivered” in practice, given the closure of domestic trading platforms after September 2017.

C argued that technical and regulatory barriers made delivery impossible. But the tribunal dismissed this claim, explaining that:

• Legal barrier? No law prohibits private individuals from transferring Bitcoin.
• Technical barrier? None exists—Bitcoin operates on decentralized blockchain networks accessible globally via digital wallets and private keys.
• Control and possession? The owner of a private key can fully control and transfer their assets at any time.

Even though Chinese exchanges ceased operations, this does not prevent peer-to-peer transfers through wallet-to-wallet transactions. Therefore, the ability to deliver Bitcoin remains intact, regardless of domestic exchange availability.

“Although Bitcoin exists in cyberspace and has unique characteristics in terms of possession and title transfer, it can still serve as an object of delivery,” the ruling affirmed.

This conclusion reinforces the idea that digital assets, while intangible, are subject to civil rights protections when they demonstrate scarcity, exclusivity, transferability, and economic value.

👉 See how blockchain technology enables secure asset transfers worldwide

FAQ: Understanding the Legal Status of Bitcoin in China

Q: Does this mean Bitcoin is legal money in China?
A: No. Bitcoin is not legal tender in China. The government maintains a strict ban on its use as currency. However, this ruling confirms that private ownership and civil transactions involving Bitcoin are legally recognized, especially when tied to valid contracts.

Q: Can I sue someone for failing to repay Bitcoin?
A: Yes. If there's a clear agreement—such as a loan or asset management contract—you may seek legal remedies through arbitration or civil litigation. Courts and tribunals can enforce compensation based on market value at the time of default.

Q: How is the value of lost Bitcoin calculated?
A: In this case, the tribunal accepted USD pricing from international exchanges like OkCoin. Although C challenged the source, the tribunal ruled that publicly available market data from reputable platforms can be used for valuation, even if those platforms aren't licensed in China.

Q: Are profits from crypto investments protected?
A: While speculative gains aren't guaranteed by law, assets themselves are considered property. If you legally own or have rightful claim to digital tokens, you’re entitled to recovery or compensation if they’re wrongfully withheld.

Q: Does this ruling apply nationwide?
A: Arbitration decisions are binding only between parties. However, this case sets a persuasive precedent—especially for commercial disputes in tech-forward regions like Shenzhen—and may influence future judicial interpretations.

Interest Claims and Compensation

While the tribunal ordered C to compensate B for asset losses based on current market value ($493,158.40), it rejected claims for interest.

The reasoning was straightforward:

• Interest typically applies to loans of legal currency.
• Since Bitcoin is not legal tender, it does not generate “interest” in the traditional sense.
• Additionally, the exact compensation amount wasn’t determined until the ruling date—so no prior debt existed that would accrue interest.

Still, C was required to pay a separate 100,000 RMB penalty for breach of contract.

Why This Ruling Matters

Experts such as Professor Qi Aimin from Guangxi Minzu University and Professor Wu Changhai from China University of Political Science and Law have praised the decision as a milestone in clarifying digital asset rights.

It affirms key legal principles:

• Property ≠ Currency: Just because something isn’t money doesn’t mean it lacks value or protection.
• Freedom of Contract: Parties can agree to use digital assets as performance objects without violating public order.
• Civil Law Over Financial Regulation: While financial regulators restrict systemic risks, civil law protects individual rights—including digital wealth.

As Wu noted:

“If a contract is entered into voluntarily and doesn’t involve illegal fundraising or money laundering, it should be upheld. This supports market confidence and protects legitimate private interests.”

Final Thoughts

This arbitration outcome doesn’t change national cryptocurrency policy—but it fills a critical gap in private law enforcement. It shows that even in a restrictive regulatory environment, individuals can rely on contract law and property principles to protect their digital assets.

For businesses, investors, and anyone engaged in blockchain-based agreements, this case offers reassurance: your crypto holdings may not be cash—but they are still worth protecting.

👉 Learn how secure digital wallets empower user-controlled asset management