In China recently, an improper promotion case has highlighted how the legal system of the country is coming closer to cryptocurrencies. In this case, the Shanghai Hongkou District Court should have Ethereum’s ether (ETH) as “generalized by law” in the form of general property.
The case, according to a post on Baidu, was a total of 20 ETHs (approximately $ 4,600), which was transferred to a “technology company”, issuing tokens through the initial coin offer (ICO).
China banned the practice of fundraising with Digital Currency Exchanges last year, which allowed users to take advantage of peer-to-peer trading.
At that time ICO projects which had already raised funds were asked to return investors.
According to the news outlet, in this case, the company denied returning 20 ETH. The plaintiffs reportedly approached by text messages, letters sent by their lawyers, and other means. The defendant reportedly “refused to communicate” with the plaintiff.
In the court, the defendant claimed that the country of cryptocurrencies like ETH did not get recognition and it was not allowed in the country and, thus, there was no legal basis for the matter. The court ruled that the plaintiff had the right to withdraw his money because he was able to prove that he has transferred letters from Blockchain Records and Nanchang Digital Network Technology and Hangzhou Rongzi Technology confirming the funds had been received.
According to the piece’s author, this means a precedent may have been set, as the country will likely keep on admitting cryptocurrencies like ether should be protected by law. Future cases, however, may have other obstacles to go through.
According to the author, related cases would need the legal name of the person or entity, who has received the money, as well as other special data in the form of its residents. Due to the nature of cryptocurrency space, ICO projects can only add counterfeit information.
Beginning this month, the Chinese central bank announced a information about the ICOs and the Cryptocurrency business. This as crypto exchanges have been able to bypass the country’s crackdown by changing their domain names.