Chinese Court Legally Classifies Ethereum As A “Property” In ETH Theft Case
Chinese court rules Ethereum (ETH) is legal “property” in a case of theft published on April 22, 2020, on Chinese media outlet, 8BTC. According to the report, the Shenzhen-based court ruled that Ethereum’s ‘economic value’ as a medium of exchange and mining effectively makes the second largest cryptocurrency legally a property in the largest population in the world.
Chinese Court Rules: “ETH is a property”
In a ruling made by Shenzhen based court earlier this week, ETH was classified as property which legally gives the Chinese citizens power to own and distribute the crypto across the country. The case involves Li (defendant), who jointly built a project named ‘Haode Star’ with Xinyijia Company and Haode Trade Co., Ltd. (plaintiffs) launched last year April.
According to the plaintiffs, Li mastered the private key and password of the Haode Star blockchain just before resigning from Xinyijia Company in May 2019. In June 2019, Li used the password and private key to steal Ethereum tokens from a Haode subsidiary, imToken transferring them to OKEx exchange.
Li transferred 3 ETH and 4 million Haode tokens (total combining to about 6000 CYN) from the company’s wallet into his personal wallets. The court found him guilty requiring him to refund the full amount stolen charging him to seven months in prison and a fine of 2000 CYN.
This is one of cryptocurrencies largest wins in China’s courts as the ‘identification method of property’ rules showed that ETH is a property.
The Identification Method
Ethereum is a property due to two main reasons; first, property includes property, goods and “property-related interests such as virtual tokens. Secondly, ETH satisfies an economic value as it is exchanged for cash and mined showing it derives value.
Furthermore, ETH has value in the markets and can be traded publicly within China. Hence, when Li stole the ETH tokens from his former employers, the courts had a right to claim the theft as theft under criminal law applying to virtual currencies. The report from 8BTC reads,
“[This] can be interpreted as the property will not exceed the prediction possibility of the notional.”