Original Author: Li Xinyi
Introduction
On February 24, 2026, the Supreme People’s Court held a press conference. Wang Chuang, head of the Civil Second Division, introduced the year’s key work priorities and made an impressive statement:
“Formulate judicial interpretations on civil compensation for insider trading and market manipulation in the securities market, and conduct in-depth research on judicial responses to new financial cases such as private equity funds and virtual currencies.”
Over the past decade, when people discuss cryptocurrencies and Chinese law, they often think of “fraud,” “pyramid schemes,” “money laundering.” Today, it has been officially included in the Supreme Court’s annual work plan, alongside “securities markets” and “private equity funds.”
This signals something more profound than the literal meaning—
Cryptocurrencies are shifting from being a major area of criminal activity to a new node of legal regulation in civil and commercial law.
In this article, I will interpret three signals behind this statement.
Signal 1: Identity Shift — From Illegal Subject to New Type of Property
In the past, if you had a dispute arising from cryptocurrency transactions and wanted to seek justice in court, you often faced an awkward situation: the court’s doors might not be open to you.
The two most common reasons for dismissal were:
- “This matter is not within our jurisdiction” — courts might consider disputes caused by cryptocurrency transactions outside the scope of civil litigation, dismissing the case outright.
- “Your transaction is illegal, and the agreement is invalid” — courts might recognize that cryptocurrencies do not have the same legal status as legal tender, and that the transaction between the plaintiff and defendant violates financial regulations, rendering the agreement invalid and the plaintiff’s claims unsupported.
Under such judicial environments, disputes related to cryptocurrencies became legal “unsung cases.” You clearly felt you suffered losses or rights were infringed, but when standing in court, your claimed rights lacked a proper legal label or basis.
A turning point appeared at the end of 2025.
In December 2025, the Supreme People’s Court issued the “Decision on Amending the ‘Regulations on Civil Case Causes’.” This decision took effect on January 1, 2026. Its milestone significance is—
The first addition of ‘disputes over data and virtual network property’ as a primary cause of action.
What does this mean?
- Cryptocurrency now has a “household registration”: From now on, in the court’s case registration system, cryptocurrencies, digital collectibles (NFTs), and online game equipment are included under the category of “virtual network property.” They are no longer legally anonymous “black accounts.”
- From “legality” to “resolution”: Courts no longer focus on whether your transaction is legal as a precondition. Instead, they recognize that once a dispute arises, it is primarily a property rights issue that requires legal resolution. The judicial door is officially open to such disputes.
In short, only when an issue becomes a legal matter can the court judge it. For all participants in Web3 and the crypto space, this is undoubtedly the most solid foundation for building a compliant moat.
Signal 2: Discretion Shift — From One-Size-Fits-All to Fine-Tuning
If establishing causes of action solves the problem of whether a case can be filed, then the change in judicial reasoning answers “how to judge fairly.”
In recent years, cryptocurrency cases mainly followed a strict attitude—resolutely cracking down on virtual currency trading speculation and rectifying chaos in the virtual currency market, so related civil acts were deemed invalid, and losses borne by the parties. This one-size-fits-all approach was straightforward but often failed to achieve fairness in complex disputes.
Starting in 2024, a series of more nuanced rulings emerged. Courts, while recognizing the invalidity of transactions, began referencing Article 157 of the Civil Code, considering factors such as the degree of fault and the trading positions of both parties, and proportionally allocating responsibilities.
In a 2025 case in Yangpu District, Shanghai, the court adopted this approach: The entrusted wealth management relationship was invalid, but the defendant still needed to return part of the funds to the plaintiff and compensate for damages. The judge explained—“An invalid contract does not automatically eliminate existing losses,” and a fair distribution of compensation should be made based on fairness principles.
Moving from one-size-fits-all to proportional responsibility, judicial rulings are shedding rigidity and becoming more refined. The Supreme Court’s mention of “in-depth research” affirms this trend: Cryptocurrency disputes are being integrated into a more mature and detailed legal framework.
Signal 3: Remedy Shift — More Comprehensive Judicial Protection
If establishing causes of action solves whether a case can be filed, and the reasoning shift answers “how to judge fairly,” then improving remedies addresses a more practical issue—can the money be recovered?
In the past, cracking down on illegal activities involving cryptocurrencies relied mainly on criminal measures. In the criminal field, the property attributes of cryptocurrencies have been somewhat recognized. In August 2025, the Supreme Court released typical cases, including one involving cryptocurrencies, pointing out that criminals use blockchain and cryptocurrencies to transfer and conceal criminal funds, with increasingly professional and covert methods. Judicial authorities need to penetrate the surface and target precise strikes.
But the problem is: criminal action can catch people but may not recover the money. Many cases end with “people caught, money gone, and public dissatisfaction remains”—the involved funds are either squandered or difficult to recover, leaving victims empty-handed.
This is another deep meaning behind the Supreme Court’s statement.
As responses to new financial cases involving virtual currencies improve, future paths will become more diverse: beyond criminal accountability, civil compensation mechanisms are becoming an important supplement. Judicial concepts are quietly shifting—from a focus solely on enforcement to a combination of enforcement and compensation.
For market participants, this means two things:
- First, remedies are more complete. The rights of the compliant and the harmed have more dimensions of protection, no longer limited to waiting for criminal restitution.
- Second, the cost of illegal behavior is truly increased. The risk of loopholes and opportunism is being reassessed. Risks are being reconstructed by the judiciary.
Conclusion
As the Yangpu Court judge said: “In the context of ongoing risks from virtual assets, investors should establish a sense of responsibility that ‘risks are borne by oneself, and compliance is prioritized’… The judiciary’s steady response to virtual currency investment and financing activities helps guide the market back to rationality.”
This statement clearly highlights the core attitude today: For cryptocurrencies, the judiciary is doing three things—acknowledging their existence, facing their disputes, and regulating their judgments.
The road ahead is long, but the direction is clear. Of course, some facts must be recognized:
- The establishment of new causes of action does not mean the legalization of transactions. Filing a case does not guarantee protection.
- Refined discretion does not mean exemption from risks. More detailed judgments do not mean losses can be compensated.
But the most important change is: when disputes occur, the court’s doors are no longer closed. Perhaps this is the essence of the rule of law—no encouragement, no indulgence, but also no avoidance.
