Cryptocurrency in China: Over the Counter, Under the Table

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There remains a great deal of confusion surrounding the legal status of cryptocurrency in China.Between headlines like “China Bans Bitcoin”, “China Bans Crypto Exchanges?”, and “China Bans Bitcoin Mining,” it’s no surprise that most people are unclear on where China stands on cryptocurrency and whether that has any real bearing on how its citizens behave.We hope to demystify this and offer some insight into the legal status of cryptocurrency and related matters.In China, bitcoin is legally recognized and protected as virtual property. This has been the law since 2013 and the classification was reconfirmed in the recent Hangzhou court ruling.However, this does not recognize bitcoin or other cryptocurrencies as legal currency. Hence, any use of Bitcoin as a currency is illegal. Occasional peer-to-peer OTC transactions are acceptable, as long as the behavior remains on a small scale. All mainland financial institutions are barred from any involvement in virtual currencies and…

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