Original Author: Li Xinyi
Introduction
On February 24, 2026, the Supreme People's Court held a press conference. Wang Chuang, the head of the Civil Division II, made a memorable statement while introducing the key work priorities for the year:
"Formulate judicial interpretations on civil compensation for insider trading and market manipulation in the securities market, and conduct in-depth research on judicial response measures for new types of financial cases such as private equity funds and virtual currency."
Over the past decade, when people talked about cryptocurrency and Chinese law, they often associated it with "fraud," "pyramid schemes," and "money laundering." Today, however, it has been officially included in the Supreme Court's annual work plan, standing alongside "securities market" and "private equity funds."
The signals this sends are far more profound than the literal meaning—
Cryptocurrency is transitioning from a hotspot for criminal offenses to a new phase of civil and commercial standardization.
In this article, I will interpret the three major signals behind this statement.
Signal 1: Identity Shift—From Illegal Subject Matter to New Type of Property
In the past, if you encountered a dispute due to cryptocurrency transactions and sought legal recourse, 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 under our jurisdiction"—The court might consider that disputes arising from cryptocurrency transactions do not fall within the scope of civil litigation accepted by the people's court, directly dismissing the case.
- "Your transaction is illegal, and the agreement is invalid"—The court might determine that cryptocurrency does not have the same legal status as fiat currency, and the transaction between the plaintiff and defendant violates financial regulations, rendering the agreement invalid. Consequently, the plaintiff's claims cannot be supported.
In such a judicial environment, cryptocurrency-related disputes became unnamed lawsuits in the legal sense. You might feel that you suffered losses or had your rights infringed upon, but when you stood in court, the rights you asserted lacked a suitable name and legal footing.
A turning point emerged at the end of 2025.
In December 2025, the Supreme People's Court issued the "Decision on Amending the Provisions on the Causes of Action in Civil Cases," which took effect on January 1, 2026. This amendment was of milestone significance—it marked the first time that 'data and online virtual property disputes' were added as a first-level cause of action.
What does this mean?
- Cryptocurrency gained a "household registration": From then on, in the court's case registration system, cryptocurrency, digital collectibles (NFTs), and online game equipment were collectively categorized under "online virtual property." They are no longer legally unidentified "unregistered individuals."
- From "Is it legal?" to "How to resolve it?": The court no longer dwells on the preliminary question of whether your transaction is legal but acknowledges—once a dispute arises, it is first and foremost a matter of property rights that requires legal intervention. The judicial doors are now officially open to such disputes.
In short, only by first becoming a legal matter can the court adjudicate it according to the law. For all participants in the Web3 and crypto space, this undoubtedly lays the most solid foundation for building a compliance moat.
Signal 2: Adjudication Shift—From One-Size-Fits-All to Refinement
If establishing the cause of action solves the problem of "whether a case can be filed," then the shift in adjudication logic answers "how to adjudicate fairly."
In recent years, cryptocurrency cases were primarily adjudicated based on a clear attitude: resolutely cracking down on virtual currency trading speculation and rectifying the chaos in the virtual currency market. Therefore, related civil acts were deemed invalid, and losses were to be borne by the parties themselves. Although this one-size-fits-all logic was straightforward, it often failed to achieve fairness in individual complex disputes.
Starting in 2024, a series of more refined precedents emerged. While still finding transactions invalid, courts began invoking Article 157 of the Civil Code, taking into account factors such as the degree of fault and the parties' positions in the transaction to apportion liability proportionally.
In a 2025 case in Shanghai's Yangpu District, the court adopted this approach: the entrusted wealth management relationship was invalid, but the defendant was still required to return part of the funds to the plaintiff and compensate for losses. The judge's explanation was crucial—"the invalidity of the contract does not automatically eliminate existing losses"; it is necessary to reasonably allocate the compensation ratio under the principle of fairness.
From a one-size-fits-all approach to proportional liability allocation, judicial adjudication is moving away from rigidity and toward refinement. The Supreme Court's mention of "in-depth research" in this context confirms this trend: cryptocurrency disputes are being incorporated into a more mature and detailed rule-of-law framework.
Signal 3: Remedy Shift—More Comprehensive Judicial Relief
If establishing the cause of action solves the problem of whether a case can be filed, and the shift in adjudication logic answers how to adjudicate fairly, then the improvement of relief paths addresses a more practical question—whether the money can be recovered.
In the past, criminal approach was the main breakthrough in combating currency-related illegal crimes. In the criminal field, the property attributes of cryptocurrency have actually gained some recognition. In August 2025, typical cases released by the Supreme Court included one involving cryptocurrency, pointing out that criminals are using blockchain and cryptocurrency to transfer and conceal criminal proceeds with increasingly professional and covert methods, and judicial organs need to penetrate the surface and strike accurately.
However, the problem is: criminal crackdowns can catch people but may not necessarily recover the money. In many cases, the outcome is "the criminals are caught, the money is gone, and public grievances remain"—the involved funds are either squandered or difficult to recover, often leaving victims empty-handed.
This is another deeper implication of the Supreme Court's statement.
As judicial responses to new types of financial cases, such as virtual currency, continue to improve, future paths will become more diverse: in addition to criminal accountability, civil compensation mechanisms are becoming an important supplement. The judicial philosophy is also quietly shifting—from the past focus on "only cracking down" to gradually "cracking down while also ensuring compensation."
For market participants, this means two things:
- First, relief channels are more complete. The rights and interests of compliant parties and victims are protected in more dimensions, no longer relying solely on criminal restitution.
- Second, the real cost of illegality has increased. The侥幸心理 (jiǎoxìng xīnlǐ -侥幸心理) of exploiting loopholes is being re-evaluated. Risks are being restructured by the judiciary.
Conclusion
As a judge from the Shanghai Yangpu Court stated: "Against the backdrop of持续外溢 (chíxù wàiyì -持续外溢) of virtual asset risks, investors should establish a sense of responsibility for 'bearing their own risks and prioritizing compliance'... The judiciary's稳健回应 (wěnjiàn huíyìng -稳健回应) to cryptocurrency-related investment and financing activities helps guide the rational return of the market."
This statement actually highlights the core attitude at present: Regarding cryptocurrency, the judiciary is doing three things—acknowledging its existence,正视 (zhèngshì -正视) its disputes, and standardizing its adjudication.
The road is long, but the direction is clear. Of course, several facts need to be清醒认识 (qīngxǐng rènshi -清醒认识):
- The establishment of a new cause of action does not equate to the legalization of transactions. Being able to file a case does not mean it is protected.
- Refined adjudication does not equate to the elimination of risks. More detailed judgments do not mean losses will be compensated.
But the most important change is that when disputes occur, the court's doors are no longer tightly shut. This, perhaps, is the meaning of the rule of law—not encouraging, not condoning, but also not回避 (huíbì -回避).
