Chinese court approves crypto trading while Thailand bans lending and staking services
(Kitco News) - The regulatory landscape in China just got a little more complicated as a Chinese court has ruled that citizens can still trade cryptos despite the country’s ban on digital asset services and cryptocurrency trading.
According to a recent ruling from the Beijing Number One Intermediate People’s Court, investors are allowed to trade cryptocurrencies but indicated that they should be treated as virtual assets instead of currencies.
The ruling arose from a case involving a crypto loan that was made using Litecoin (LTC) back in 2015. Zhai Wenjie indicated that he loaned his friend Ding Hao 50,000 Litecoin with the agreement that Hao would pay 1,000 LTC in monthly interest.
According to the court, since Litecoin is not issued by a monetary authority and lacks backing from legal and financial frameworks, it cannot be treated as a currency.
“According to real administrative regulations and cases, our country only denies the monetary attributes of virtual currency and prohibits its circulation as currency, but the virtual currency itself is a virtual property protected by the law,” the court ruled.
The judge on the case cited a lack of laws prohibiting the perception of Litecoin as an illegal asset, which led the judge to rule in favor of the plaintiff and ordered Hao to return the LTC to Wenjie.
Despite the ban on cryptocurrency services in China, recent data from Chainalysis shows that Chinese citizens have been increasingly utilizing centralized services to get access to crypto, which suggests the ban is being loosely enforced. China currently ranks tenth globally in terms of crypto adoption.
|SWIFT explores the use of blockchain technology to improve efficiency|
Thailand bans crypto lending and staking products
Meanwhile, In Thailand, a Thursday press release from the country’s Securities and Exchange Commission (SEC) indicates that the regulator has prohibited cryptocurrency companies from offering digital asset lending and staking products or depository services.
The reason for the decision is to protect traders and the general public from business risks associated with companies offering these services and to protect users from utilizing services that they think meet regulatory requirements – but do not.
This ruling follows the collapse of several notable lending, staking and depository platforms, including the decentralized finance protocol Terra, and the centralized finance providers Celsius and Voyager.
The SEC cited a widespread lack of risk management from crypto stakers and liquidity issues that have led some providers to stop their services and suspend the withdrawal of digital assets as reasons why this ruling was needed.
Authorities in Thailand have been tightening their control over the crypto industry in the country since being criticized for failing to protect local investors at Zipmex, a licensed crypto exchange that temporarily suspended withdrawals in July.