Governments Eye Crypto Taxes as Bitcoin Targets $100K; China Declares BTC a Commodity but Warns of Legal Risks
Bitcoin’s surge toward $100,000 has caught the attention of global governments looking to tighten tax enforcement on cryptocurrencies, while a Chinese court reiterated its stance on Bitcoin, sparking mixed reactions amid the booming market.
China Court: Bitcoin is a Commodity but Activities Remain Illegal
In a notable decision, Sun Jie, a commercial judge at the Songjiang District People’s Court in Shanghai, declared that Bitcoin is recognized as a commodity in China. Despite this classification, the judge reaffirmed that crypto-related activities, such as trading, issuance, or payments, are illegal financial practices under Chinese law.
Judge Sun’s comments, published on the court’s official WeChat channel, come at a time when the cryptocurrency market has reignited excitement, which she compared to a “new gold rush.”
The ruling stemmed from a case during the 2017 crypto boom, where a defendant provided token issuance services for a fee of 300,000 yuan (approximately $44,000 at the time). While the defendant drafted a white paper, they did not assist with the actual issuance, believing it was the plaintiff’s responsibility.
The court declared the contract void, stating the services violated laws surrounding illegal financial activities. However, Judge Sun clarified that “holding virtual currencies, like Bitcoin, is not illegal for individuals.”
Parallel Rulings on Crypto Contracts
The Shanghai court’s position aligns with a recent case in Hunan province’s Jiahe County People’s Court. In this dispute, a plaintiff sought the return of $6.27 million in USDT after disagreements arose regarding a crypto mining equipment purchase.
The court rejected the claim, reiterating that cryptocurrencies such as Bitcoin, Ether, and USDT do not hold legal tender status in China and cannot be used as currency. Consequently, the agreement was deemed invalid and fell outside the scope of legal protection under Chinese law.
Political Speculation: Will China Ease Crypto Restrictions?
The broader crypto community continues to speculate whether China may soften its stance on digital assets. Following political shifts, including U.S. President-elect Donald Trump’s recent victory, some experts believe Beijing could ease restrictions, mirroring the more crypto-friendly approach seen in Hong Kong.
While rumors have circulated throughout the year about a potential reversal of China’s crypto ban, Beijing has yet to make any formal moves. For now, its firm stance remains unchanged, reinforcing the divide between Hong Kong’s progressive policies and mainland China’s regulatory environment.
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