In rare move, mainland China court sells seized blockchain tokens overseas

Shanghai, mainland China’s financial centre, has become one of the first cities in the country to use an overseas cryptocurrency trading platform to reprice and sell more than 90,000 filecoins – a blockchain-based storage token – that were seized in criminal cases.

A district-level court partnered with a third-party institution in mainland China, which sold the cryptocurrency on a licensed platform in Hong Kong, according to an announcement by Shanghai’s Supreme People’s Court on Tuesday.

The proceeds from the sale were transferred to a court-controlled bank account and will be allocated to the national treasury or refunded to the victims, in line with legal procedures.

The move came amid growing debate in China about stablecoins and their role in digital finance. While Beijing is piloting its central bank’s digital currency, known as e-CNY, it continues to enforce a strict crackdown on cryptocurrency-related activities on the mainland, such as bitcoin mining and centralised trading.

But there have been discussions among market players and academics about whether mainland China should emulate Hong Kong – which introduced its first stablecoin ordinance on August 1 – to promote the offshore adoption of the yuan.

Handling crypto assets in cases involving Chinese citizens and companies also presents new challenges for the judiciary.

  

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