Bitcoin’s $100,000 push wakes up tax collectors and Vitalik visits the real Moo Deng: Asia Express

Chinese court warns that Bitcoin is a commodity but its use is illegal

According to Sun Jie, a commercial judge at the Shanghai Songjiang District People’s Court, cryptocurrencies are considered commodities in China and are not explicitly prohibited by law.

However, cryptocurrency activities such as trading, issuance, or payments are considered illegal financial activities.

Sun’s statement, posted on Songjiang Court’s official WeChat channel, provides legal guidance for cryptocurrencies during the booming market cycle, which she calls the new “gold rush.”

The judge was commenting on a case during the 2017 cryptocurrency ‘gold rush’ in which the defendant provided token issuance guidance services to the plaintiff at a cost of 300,000 yuan (about $44,000 at the time). The defendant wrote a white paper and provided services, but did not help issue tokens, believing it was the plaintiff’s responsibility.

Sun said the contract between the two parties was declared null and void as the cryptocurrency-related services specified in the contract were deemed illegal financial activities. But she said that while it is illegal for commercial entities to issue tokens or engage in transactions, “it is not illegal for individuals to simply hold virtual currency.”

The Shanghai court’s interpretation is consistent with a recent case that occurred at the Zahe County People’s Court in south-central China’s Hunan Province.

According to the city media Rednet on the 21st, the court recently dismissed the plaintiff’s claim to return $6.27 million USDT.

The dispute arose from a November 2021 WeChat contract in which the plaintiff paid $23.67 million in USDT for cryptocurrency mining equipment, but differences arose between the parties over time.

The court stated that cryptocurrencies such as Bitcoin, Ethereum, and USDT are not legal tender and cannot be used as currency. The contract to provide cryptocurrency mining equipment for USDT was ruled invalid, and the court dismissed the plaintiff’s claim on the grounds that it did not fall within the scope of legal protection under Chinese law.

The recent election victory of US President-elect Donald Trump has led experts to suggest that China may relax its strict stance on cryptocurrencies.

A flurry of social media chatter throughout the year has fueled rumors that China will lift its cryptocurrency ban, but the country has given no official indication that it will do so. However, regulations have been relaxed in Hong Kong.

As Bitcoin reaches new highs, governments are taking note of cryptocurrency tax opportunities.

As the price of Bitcoin has surged toward $100,000 since Trump’s election, discussions on cryptocurrency taxes in East Asian countries are progressing.

In Korea, the opposition Democratic Party has pushed for a plan to begin taxing cryptocurrency income from January 1 and increase the tax base from 2.5 million won (about $1,800) to 50 million won (about $36,000).

South Korea’s plan to impose a 20% tax on cryptocurrency profits has been delayed several times. It was initially scheduled to take effect in 2021, but due to public backlash it was postponed to 2023 and then again to 2025. Earlier this year, the ruling party submitted a proposal to postpone the cryptocurrency tax until 2028.

According to Taiwan’s Central News Agency, Finance Minister Chuang Tsui promised to review cryptocurrency tax regulations within three months.

At a legislative hearing on November 18, Taiwanese officials said the country has yet to effectively collect tax profits from traders profiting from the booming cryptocurrency market. Kuomintang lawmaker Lai Shyh-bao and National Tax Service director Sung Hsiu-ling argued that investors should add cryptocurrency profits to their income taxes accordingly.

In Taiwan, personal income tax is levied up to 40%. However, personal income tax is only levied on income generated within Taiwan, so there is a loophole in making profits on overseas exchanges.

Meanwhile, Japan is pursuing economic stimulus measures and large-scale tax reform in accordance with Prime Minister Shigeru Ishiba’s request for bipartisan discussion. The reforms, expected to be passed in late 2024, mark a policy shift for the ruling party, which previously advocated for higher taxes. Key proposals include lowering the cryptocurrency tax rate from its current variable ‘miscellaneous tax’, which can reach 55%, to 20%.

AI speaks out in 80,000 Bitcoin misappropriation scandal

A major political controversy erupted in the Indian state of Maharashtra ahead of the 2024 general elections.

Ravindranath Patil, a former Indian Police Service officer and forensic auditor, has alleged that 80,000 Bitcoins seized during the investigation into a cryptocurrency Ponzi scheme in 2018 were misused to fund political campaigns.

Patil claimed to have audio recordings of Supriya Sule, a member of parliament from the Nationalist Congress Party, and Nana Patole, the state president of the Indian National Congress.

The rival party, the Bharatiya Janata Party (BJP), released audio recordings of Sule and Patole discussing the misuse of Bitcoin to fund political campaigns. However, both politicians denied that the voices in the recording were their own, and local media reported that the voices were actually generated using AI. Sule and Patole have reportedly filed a cyber police complaint against Patil.

The controversy centers on the GainBitcoin Ponzi scam, which was investigated by Maharashtra police in 2017, of which Patil was the forensic auditor. The scheme, led by brothers Amit Bharadwaj and Ajay Bharadwaj, duped thousands of investors across India by falsely promising huge returns on their cryptocurrency investments. The scheme involved 80,000 bitcoins worth 660 billion rupees (about $1 billion) at the time.

In a related case in 2022, Patil and cyber expert Pankaj Ghode were accused of stealing some of the seized bitcoins.

Patil was arrested in 2022 and released in 2023. He claimed that Bitcoin wallets seized in 2018 were exchanged and the funds were sold overseas and then funneled to Sule and Patole to finance their election campaigns.

Hong Kong adds 120 blockchain companies to business hub

Hong Kong government business hub Cyberport has added more than 120 blockchain businesses in the past 16 months.

Cyberport currently has a list of 270 blockchain technology companies, according to a discussion paper released by the Hong Kong Legislative Council.

Hong Kong invested $50 million in Cyberport in its 2023-24 budget.

The city is expected to continue pursuing Web3 in the final period of 2024. Recently, Securities and Futures Commission CEO Julia Leung said her agency expects to distribute 11 more cryptocurrency licenses by the end of the year.

So far, the SFC has only approved one license for the Hong Kong Virtual Asset Exchange in 2024, bringing the total number of licensed operators in Hong Kong to three.

Fourteen are awaiting the agency’s decision on their license applications, and 15 have had their licenses withdrawn or returned.

Vitalik Buterin meets viral sensation Mudeng

It is no longer uncommon for cryptocurrency startups to grace the covers of mainstream websites and magazines.

This week, Ethereum co-founder Vitalik Buterin was the center of Thailand’s Kheow Open Zoo Facebook page.

Buterin was spotted with international superstar Moo Deng, the zoo’s resident pygmy hippopotamus.

Moo Deng has gone viral online for her expressive personality and even inspired the popular Moo Deng memecoin.

Buterin said he frequently receives unsolicited memecoins from community members and that any memecoins sent to his wallet will be donated to charity.

Last October, Buterin donated more than $180,000 of ETH sent to his address under the name Moo Deng memecoins to biotech charity Kanro.

subscribe

The most interesting read on blockchain. Delivered once a week.

Yoon Yohan

Yohan Yoon is a multimedia journalist covering blockchain since 2017. He has contributed as an editor to Forkast, a cryptocurrency media outlet, and has covered Asian technology stories as an assistant reporter for Bloomberg BNA and Forbes. He spends his free time cooking and experimenting with new recipes.