On 24 february 2026, the supreme people's court (hereinafter referred to as the “supreme court”) held a press conference in which it made clear that it would “in-depthly examine new types of financial response initiatives such as private funds, asset support securities, supply chain finance, internet finance, virtual currency, etc., and improve the system of financial justice guarantees” as one of the four areas of the supreme court's follow-up priorities. This statement was made clear at the important launch of the year of the “155” plan of the supreme court, releasing the people's court's strong determination to improve the framework of the rule of law for this type of dispute, to clarify the boundaries of power of the virtual currency as a virtual property of the network on the basis of financial risk prevention, and to achieve the objective of the socialist rule of law。
In fact, over the past few years there has been a proliferation of civil disputes arising from virtual currency, fraud, distribution, money-laundering and the transfer of illicit assets, especially in the course of civil disputes, and there have been many contentious questions about whether the processing of cases would conflict with the effective regulation of the financial order of the sector concerned。
There is no clear definition of “virtual currency” in our current legislation. In this connection, reference may be made to the circular on further prevention and management of risks related to virtual currency issued jointly by the people's bank of china, the national development and reform commission, the ministry of industry and information technology, the ministry of public security, the general directorate of market supervision, the general directorate of financial supervision, the china securities commission, the state exchange agency and others on 6 february 2026 (silver) the provisions of article 1, paragraph 2, of no. 42, hereinafter referred to as “no. 42”, are understood to mean that virtual currencies typically include digital assets that have major characteristics such as bitcoin, tataco and tadaco issued by non-monetary authorities, use of encrypted and distributed books or similar technologies, or exist in digital form. As such assets continue to innovate, such as the issuance of stable currencies, new changes may occur in the characteristics and manifestations of virtual currencies。
In terms of rules, the regulation of virtual currency and related legal acts consists mainly of normative documents issued by the relevant administrative authorities, the supreme council and the supreme people's procuratorate. At the level of administrative supervision, from an early focus on financial risk alerts to a gradual strengthening of regulation following a focus on related activities, to the emergence of a threat to the stability of the financial order in virtual currency transactions, the tone of a clear prohibition and a severe strike has gradually been established. According to the circulars currently issued by the people's bank of china, ministry of industry and information technology, china banking supervision and management committee, etc., on the protection against the risks of bitcoin (silver) [2013] document no. 289, implemented on 3 december 2013, the bulletin of the board of insurance of the general directorate of industry and commerce of the ministry of industry and information technology of the central network of the people's bank of china, issued by the superintendence and supervisory board of the bank's committee on the prevention of the risk of financing the distribution of currency (acted on 04. 09. 2017), article 42 and other documents stipulate that, in order to maintain the stability of the financial order, activities related to the exchange of legal and virtual currency, the exchange of virtual currency, the provision of information and pricing services for virtual currency transactions, and the financing of currency issuances are illegal financial activities and are strictly prohibited and prohibited by law. Nor may offshore units and individuals provide virtual currency-related services to domestic entities in any form illegally。
At the practical level of the judiciary, the people's courts ' legal decisions on transactions, operations, etc. Of virtual currency have also continued the above-mentioned tone and have given rise to the more obvious nature of the division of criminal and civil jurisdiction. In the area of criminal cases, virtual currency can be identified as “property” and “computer information system data”, and related fraud, theft, etc. May be held criminally liable. In addition, virtual currency may even trigger special rules of application in a given offence. In accordance with the interpretation of certain issues of the law applicable to criminal cases of concealment, concealment of proceeds of crime and proceeds of crime, published on 26 august 2025, the judicial interpretation explicitly classifies the transfer of funds using a virtual currency transaction as a new criminal offence and extends the presumption of “subjective knowledge” in the interpretation of certain issues of the law applicable to criminal cases of money laundering in relation to virtual currency transborder transactions。
In the handling of civil disputes, the virtual currency has been identified in some cases as a “network virtual property” under article 127 of the civil code, affirming its property attributes and economic values, but expressly denying its monetary attributes and legal rewards. Although the courts may deal with certain types of property in such areas as the distribution of joint property between spouses, inheritance of estates, execution of property in civil cases, the people's courts generally take full account of the provisions of the aforementioned documents in such matters as disputes relating to contracts for the purchase and sale of virtual currency, contracts for the commission of contracts, disputes relating to private borrowing, and invoke in combination the provisions of article 153 of the civil code concerning good public order or of article 71 of the arbitration act (as amended in 2025) concerning the public interest, giving priority to the maintenance of public order and good public order, such as the national financial order, and the protection of the public interest. A typical case is that of the supreme court, case 199. The arbitral tribunal in that case, at the arbitration stage, held that the respondent's failure to deliver, as contracted, a common agreement and considered to have property value, such as bitcoin, was a breach of contract and that the claimant should be compensated for the loss of the corresponding property, and that the amount of the corresponding renminbi had been converted by reference to information on the collection price of bitcoin published on the offshore website. After review, the people's court found that the arbitral award awarded to the respondent the equivalent of the united states dollar in bitcoin and the conversion of the united states dollar into a renminbi was a disguised endorsement of the payment transaction between bitcoin and the legal currency, contrary to the state's regulation of virtual monetary finance and to the public interest, and that the people's court should decide to set aside the arbitral award。
However, as the number of virtual currency disputes continues to grow, the handling of such cases is accompanied by a number of legal difficulties that need to be resolved, including how the virtual currency determines the value or exchange rate of the loss when the transaction is found to be invalid and unable to return the original goods, how to construct a standard of proof for anonymous virtual currency transactions vis-à-vis specific de facto individuals under the current rules of evidence, and how digital assets using special block chain techniques, such as virtual currency, are enforced under current enforcement rules and at the technical level. We believe that with the upgrading of the virtual property dispute in the virtual currency dispute to a separate category of jurisdiction by the supreme court, as amended on 17 december 2025, the provision of more typographical rules and more detailed guidance on the judicial practice of virtual currency disputes, the handling of the dispute will be smoother and more rational。
Introduction by counsel:
Sun, head, senior partner, beijing branch, shanghai co-operation law office; managing director, pacific society of china; member of the editorial board of the chinese association of small and medium-sized enterprises, guidelines for the evaluation of the effectiveness of the management system for small and medium-sized enterprises; expert on the compliance system for economics and trade enterprises outside zhejiang province; list of the von deng international trade/world trade zone guide for the grand china-china region 2025。
