Officials from China's Supreme Court have stated that as authorities plan to study judicial rules involving virtual currencies and cross-border finance, the scrutiny of disputes related to cryptocurrencies will intensify. Liu noted that judicial bodies will accelerate the legal interpretation of civil compensation related to insider trading and market manipulation cases, although he did not provide a specific timeline. Despite the ongoing implementation of the world's strictest crackdowns on cryptocurrencies in mainland China, local courts have previously regarded cryptocurrencies like Bitcoin as virtual property in disputes involving ownership and asset recovery. A framework document released in February explicitly stated that virtual currencies such as Bitcoin, Ethereum, and USDT do not have the legal status of fiat currency and cannot circulate in the market. The notice also classified crypto trading, token issuance, market-making services, and crypto-related financial products as illegal financial activities. Financial institutions and payment companies are further prohibited from providing settlement, custody, insurance, or account services related to crypto activities, while internet platforms have been instructed not to promote or host crypto-related businesses. Additionally, the guidance issued in February declared that civil legal actions involving cryptocurrency investments would be considered invalid, and investors would need to bear any resulting losses. In contrast to the restrictions in the mainland, Hong Kong continues to develop a regulated digital asset industry under an independent legal framework.
