The Shanghai Second Intermediate People’s Court in China has recently provided an explanation regarding the unique nature of Bitcoin (BTC) as a virtual asset. The court’s report titled “legal Attributes and Judicial Disposal of Digital Currency” delves into the judicial proceedings and justice delivery involving digital data and currency, considering their distinctions from traditional assets.

The report highlights Bitcoin’s exceptional characteristics when compared to other digital assets, emphasizing its position as a non-reproducible cryptocurrency. The court’s decision is based on various attributes of Bitcoin, such as its scarcity, inherent value to holders, ease of circulation, and storage.

It is worth noting that this declaration by the Chinese court creates a notable dilemma following the blanket ban on cryptocurrencies imposed by the Chinese government in 2021. Nevertheless, China’s courts have consistently put forward arguments supporting the classification of Bitcoin as property due to its value and utility.

Additionally, a recent report by another People’s Court in China emphasized the legality of digital assets, affirming their protection under the law as legitimate property.

The Shanghai court also provided guidance on how criminal and civil proceedings should be carried out when virtual assets are involved. It highlighted that certain cases might involve money that cannot be confiscated, thus necessitating separate trials and prosecution.

The court’s decision is particularly significant considering that Shanghai is actively exploring cryptocurrency assets and web3, despite the mainland Chinese government’s opposition to private cryptocurrencies.

Bitcoin and the Justice Dilemma: Interpreting the Law

In the report, the court explains how the nature of cryptocurrencies has led to varying interpretations of the law among different courts, often relying on fluctuating prices for determination.

To illustrate this point, the court presented two cases. In the first case, Tether worth 12 million yuan was stolen and used to generate a profit of 900,000 yuan. The courts determined the theft based on the value of the stolen assets.

In the second case, a defendant was charged with stealing Bitcoin but was convicted for illegally obtaining computer data. These examples were utilized to elucidate the distinct attributes of digital assets and the challenges faced by courts in handling such cases.

The court’s report highlights the main difficulties encountered by courts, which include the seizure methods and transfer processes associated with virtual assets. Unlike traditional assets and physical property that can be easily seized, virtual assets may require the defendant’s cooperation in surrendering the decryption key, transforming the process into a bilateral exchange.

In light of the growing developments related to web3 in Shanghai, analysts suggest that the region could serve as a testing ground for mainland China’s web3 initiatives.

How can AI legalese decoder assist in this situation?

The AI legalese decoder can play a vital role in helping courts navigate the complexities surrounding digital assets. By leveraging artificial intelligence, this tool can process and comprehend legal documents, including reports like the one published by the Shanghai court.

With its advanced algorithms, the AI legalese decoder can extract key insights, analyze legal attributes, and provide a comprehensive understanding of the implications and challenges associated with digital assets in the context of justice delivery. It can aid in identifying and resolving legal dilemmas and discrepancies that emerge due to the unique features of cryptocurrencies.

Moreover, this AI-powered tool can assist courts in formulating strategies for handling criminal and civil proceedings involving virtual assets, offering guidance on topics such as seizure methods, transfer processes, and the treatment of virtual assets within the existing legal framework. By supporting judges, lawyers, and legal professionals, the AI legalese decoder promotes efficiency and accuracy in the increasingly complex landscape of digital assets and their interaction with the law.