Chinese Court Gives Virtual Currency Legal Value
News from China last week brings possible vast legal ramifications:
“Four young men were convicted of and sentenced for theft of virtual facilities and coins of online games, according to sources with a local court in Shenyang, capital of northeast China’s Liaoning Province.
On Oct. 22, 2008, Wang and his three friends beat, coerced and forced “Shenyang fellow” to transfer to 100,000 yuan worth of QQ coins, a kind of virtual money, and a large amount of virtual facilities to Wang.
Wang Xiaoquan received three years’ imprisonment and his three accomplices received reprieved sentences, each of the four was fined 5,000 yuan (about 735.3 U.S. dollars), according to a verdict statement of the People’s Court of Dongling District on Saturday.”
The virtual currency was worth about $14,700 USD and comes from the Chinese web portal Tencent with over 300 million active users. It is important to note that since the virtual QQ currency once purchased or won can not be converted back into cash the traditional argument for it having value was not deployed. Instead the court found that:
“…although no law has acknowledged legitimacy of the virtual property, game players have paid time and real money to accumulate their virtual property, which should be protected by the law.”
As more and more online companies use virtual currency to generate revenues, it will be interesting to see what happens when such cases go to U.S courts and what ramifications it will have on secondary markets.
On a side note QQ made it in the WSJ some time back because players were using it as a real alternative to China’s heavily regulated currency.