In a landmark ruling that came on September 7, 2018, the Supreme Court in China has announced that any evidence that has been authenticated by using blockchain technology is valid in legal disputes.
The Supreme court stated in an announcement:
Internet courts shall recognize digital data that are submitted as evidence if relevant parties collected and stored these data via blockchain with digital signatures, reliable timestamps and hash value verification or via a digital deposition platform, and can prove the authenticity of such technology used.
The court has also said:
The parties and other participants in the litigation shall electronically process the litigation materials such as the identification certificate, the copy of the business license, the power of attorney, the legal representative’s identity certificate, and the evidence materials such as documentary evidence, appraisal opinions, and transcripts by technical means. After being submitted and approved by the Internet Court, it is deemed to meet the original form requirements. If the other party objects to the authenticity of the above materials and has reasonable grounds, the Internet court shall require the parties to provide the original.
This is a part of a series of other more detailed rules that are meant to clarify other issues related to how Chinese internet courts should handle legal disputes. China founded its first internet court in Hangzhou in August 2017 which deals with disputes related to Internet-based topics and digital data.
In relation to a copyright infringement case between a media company and a technology company, in January, the court had ruled in favor of evidence based on the blockchain being legally acceptable. More internet courts are supposed to spring up in other parts of China. Two such internet courts are to be established in Beijing and in the city of Guangzhou.
These courts would conduct all of their business online including “litigation acceptance, delivery, mediation, evidence exchange, pre-trial preparation, court trial, and sentencing”. The ruling has come in the wake of China implementing a crackdown on all topics related to cryptocurrency.
Companies such as WeChat and Alipay then stopped all support for any activity related to cryptocurrency. WeChat terminated media groups that covered blockchain and cryptocurrency whereas Alipay imposed restrictions or bans on Alipay accounts involved in cryptocurrency transactions.
The Chinese government has also banned Initial Coin Offerings (ICOs) and even domestic cryptocurrency trading and exchanges. However, the Chinese government has shown increased support for blockchain and distributed ledger technology in the trade sector. Private corporations have adopted blockchain and decentralized tech. Chinese conglomerate, Sinochem Energy Technology Co Ltd., has completed a gasoline shipment to Singapore with the help of blockchain technology.
Companies like Tencent and Alibaba are going out of their way to achieving blockchain patents. Even the Chinese Central Bank has issued 68 filings for decentralized ledger technology patents. The demand for blockchain patents in China is so massive that 56% of all issued distributed technology-related patents in the world are those of Chinese companies.