Bitcoin’s $100K push wakes taxman, Vitalik visits real Moo Deng: Asia Express
2024.11.21 17:20
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China court says Bitcoin is a commodity but warns its related uses are illegal
Cryptocurrencies are considered commodities in China and are not explicitly prohibited by law, said commercial judge Sun Jie at Songjiang District People’s Court in Shanghai.
However, crypto activities—like trading, issuance, or payments—are considered illegal financial activities.
Judge Sun Jie says Bitcoin is a commodity but warns that engaging in crypto carries legal risks. (Songjiang District People’s Court)
Sun’s statement posted on Songjiang Court’s official WeChat channel provides legal guidance on cryptocurrencies during a booming market cycle, which she calls the new “gold rush.”
The judge was commenting on a case during the 2017 crypto “gold rush” in which a defendant provided token issuance guidance services to a plaintiff for a cost of 300,000 yuan (around $44,000 at the time). The defendant delivered the service by drafting a whitepaper but did not assist in token issuance, which they believed was the plaintiff’s responsibility.
Sun stated that the contract agreement between the two parties was declared invalid as the crypto-related services outlined in the contract were considered illegal financial activities. However, she said while it is illegal for commercial entities to issue tokens or participate in transactions, “it is not illegal for individuals to simply hold virtual currency.”
The Shanghai court’s interpretation aligns with a recent case in the Jiahe County People’s Court in Hunan province of south-central China.
According to the municipal-owned media outlet Rednet on Nov. 21, the court recently rejected a plaintiff’s claims that demanded the return of $6.27 million in USDT.
The dispute stems from a November 2021 WeChat agreement in which the plaintiff paid $23.67 million in USDT for crypto mining equipment, but differences between the parties arose over time.
The court said that cryptocurrencies like Bitcoin, Ether and USDT are not legal tender and cannot be used as currency. The agreement to deliver crypto mining equipment for USDT were deemed invalid, and the court dismissed the plaintiff’s claims as it did not fall within the scope of legal protection under Chinese law.
The recent election victory of United States president-elect Donald Trump has led experts to suggest China may ease its strict stance on crypto.
Throughout the year, social media chatter fueled rumors that China would reverse its crypto ban, but Beijing has not officially provided any formal indication that it would do so. It has however eased restrictions in Hong Kong.
Governments eye crypto tax opportunities as Bitcoin reaches new highs
Bitcoin’s price surge towards $100,000 since Trump’s election victory is advancing crypto tax discussions in East Asian nations.
Bitcoin is breaking into the financial mainstream but Asia’s major economies haven’t figured out how to tax them. (Alesia Kozik)
In South Korea, the opposing Democratic Party has pushed to begin taxing crypto gains on January 1, 2025, while increasing the taxable threshold from 2.5 million won (around $1,800) to 50 million won (around $36,000).
South Korea’s plan for a 20% tax on crypto gains has faced several delays. It was first scheduled to go live in 2021, but public backlash pushed it to 2023, then again to 2025. Earlier this year, the ruling party submitted a proposal to delay crypto tax to 2028.
In Taiwan, Finance Minister Chuang Tsui has pledged to review crypto tax regulations within three months, according to the state-backed Central News Agency.
In a legislative hearing on Nov. 18, Taiwan officials reportedly said the nation has yet to effectively collect tax profits from traders profiting from the booming crypto market. Kuomintang lawmaker Lai Shyh-bao and Sung Hsiu-ling, director of the Taxation Administration, argued for investors to accordingly add crypto gains to their income tax.
In Taiwan, personal income tax can range up to 40%. However, personal income tax is only levied on income generated within Taiwan, offering a possible loophole for profits on overseas exchanges.
Meanwhile, Japan is moving forward with a stimulus package and sweeping tax reforms following Prime Minister Shigeru Ishiba’s call for bipartisan discussions. Expected to pass by late 2024, the reforms mark a policy shift for the ruling party, which previously advocated higher taxes. Key proposals include reducing the cryptocurrency tax rate from the current variable “miscellaneous tax,” which can reach 55%, to a flat 20%.
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AI voices in 80,000 Bitcoin misappropriation scandal
A major political controversy has erupted in the Indian state of Maharashtra just before the 2024 Assembly elections.
Former Indian Police Service officer and forensic auditor Ravindranath Patil alleged that 80,000 Bitcoins seized during a 2018 cryptocurrency Ponzi scheme investigation were misused to fund political campaigns.
Patil claimed to have voice recordings implicating Supriya Sule, a member of parliament from the Nationalist Congress Party, and Nana Patole, the state president of the Indian National Congress.
The Bharatiya Janata Party (BJP), a rival political party, released the alleged voice recordings of Sule and Patole discussing Bitcoin misappropriation to fund their political campaigns. However, both politicians deny that the voices in the recordings are theirs, while local outlets reported that they were actually generated using AI. Sule and Patole have reportedly filed complaints with the cyber police against Patil.
AI voice generation suspected in a political scandal involving the alleged misappropriation of confiscated Bitcoin. (BJP)
The controversy centers on the GainBitcoin Ponzi scheme investigated by the police in Maharashtra in 2017, of which Patil was a forensic auditor. The scheme, led by brothers Amit and Ajay Bharadwaj, defrauded thousands of investors across India by falsely promising massive returns on cryptocurrency investments. The scheme involved 6,600 crores (66 billion rupees or approximately $1 billion) worth of Bitcoin, 80,000 units at the time.
In a related case from 2022, Patil and cyber expert Pankaj Ghode were accused of stealing some of these seized Bitcoins.
Patil was arrested in 2022 and released in 2023. New, he alleges the seized Bitcoin wallet in 2018 was swapped, the funds were sold overseas, then funneled to Sule and Patole to fund election campaigns.
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Hong Kong adds 120 blockchain firms to its business hub
Hong Kong’s government business hub Cyberport has added more than 120 blockchain businesses over the past 16 months.
Cyberport now has a roster of 270 blockchain technology firms, according to a discussion paper released by Hong Kong’s Legislative Council.
Hong Kong invested $50 million in Cyberport in its 2023-24 budget.
The city is expected to continue its Web3 drive in the last stretch of 2024. Recently, Julia Leung, CEO of the Securities and Futures Commission said her agency is expected to hand out a batch of 11 more crypto licenses by year-end.
So far, the SFC has only approved one license in 2024 to Hong Kong Virtual Assets Exchange, bringing the total licensed operators in the city to three.
Fourteen more are waiting for the agency’s decision on their license applications, while 15 have withdrawn or been returned.
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Vitalik Buterin meets viral sensation Moo Deng
It’s no longer unusual for crypto founders to grace the covers of mainstream websites and magazines.
This week, Ethereum co-founder Vitalik Buterin was the center of Thailand Kheow Open Zoo’s Facebook page.
Buterin was spotted with international superstar Moo Deng, a pigmy hippo living in the zoo.
Vitalik Buterin visiting Moo Deng’s home after the hippo-inspired meme coin funds his donations. (Khao Kheow Open Zoo)
Moo Deng went viral online for her expressive personality, even inspiring the popular Moo Deng memecoin.
Buterin frequently receives unsolicited meme coins from community members and has stated that meme coins sent to his wallets will be donated to charity.
In October, Buterin donated over $180,000 in ETH that were sent to his address as Moo Deng meme coins to biotech charity Kanro.
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Yohan Yun
Yohan Yun is a multimedia journalist covering blockchain since 2017. He has contributed to crypto media outlet Forkast as an editor and has covered Asian tech stories as an assistant reporter for Bloomberg BNA and Forbes. He spends his free time cooking, and experimenting with new recipes.
