UPDATED 11:17 EDT / SEPTEMBER 07 2018

EMERGING TECH

Supreme Court of China rules blockchain evidence admissible in legal disputes

The Supreme People’s Court of China, the highest level of court in mainland China, announced today that evidence obtained from distributed ledger blockchain technology can be used in court.

The announcement (in Chinese, readable in English via Google Translate) outlines a long list of clarifications of law regarding electronic evidence and how courts should behave with regards to the law. The rules take effect immediately.

Amid these additional rules and guidelines, the announcement includes a section that mentions blockchains as a legitimate source as a method for authenticating digital evidence.

“The electronic data submitted by the parties can prove their authenticity through electronic signature, trusted time stamp, hash value check, blockchain and other evidence collection, fixed and tamper-proof technical means or through electronic forensic evidence platform certification. The Internet court should confirm,” the Supreme Court published in its announcement.

Blockchain technology provides a platform for tamper-proof, shared ledgers that are cryptographically secured in order to ensure privacy for participants and provide a provably authentic audit trail. In some industries, blockchains have been explored to ease business adherence with regulatory requirements including in high-security industries such as banking and finance.

According to the court document, parties involved with submitting such evidence may present an expert to speak to the reliability and verification standards of the blockchain in question.

This announcement follows the formation of what is considered the first “internet court” during August 2017 in the city of Hangzhou in Zhejiang Province – an already widely claimed to be the center of much of China’s e-commerce industry. China plans to launch two other internet courts, one in the country’s capital of Beijing and the other in the southern city of Guangzhou.

The proceedings of the court take place entirely online and the court follows the same rules of procedure and evidence for normal trials.

CoinDesk reported in June that a judge in the Hangzhou Internet Court ruled that evidence authenticated with blockchain technology could be legally admitted in court during a copyright infringement case.

The plaintiff’s evidence was provided from the bitcoin and Factom blockchains, including cryptographic hashes to prove the provenance of data, through a third-party site named baoquan.com, a blockchain-based evidence disposition platform.

“The court thinks it should maintain an open and neutral stance on using blockchain to analyze individual cases,” the judge commented at the time. “We can’t exclude it just because it’s a complex technology. Nor can we lower the standard just because it is tamper-proof and traceable. In this case, the usage of a third-party blockchain platform that is reliable without conflict of interests provides the legal ground for proving the intellectual infringement.”

After reviewing the evidence, including that provided from blockchain sources, the judge ruled in favor of the plaintiff.

Although numerous industries have been exploring distributed blockchain platforms to provide regulatory compliance and trustworthy audit trails for regulators, the legal status of blockchain evidence has so far gone largely untested worldwide.

Businesses have already begun to emerge designed to take advantage of the tamper-proof nature of blockchains to act as legal evidence with outfits such as U.K.-based startup Cygnetise Ltd., which built a blockchain for authorized signatures for legal documents.

Another prime example is a partnership between Onchain, an open-source universal blockchain service, and China-based e-commerce giant Alibaba Group Holding Ltd. that began development on a platform named the “Law Chain” for the specific purpose of archiving stored emails as an auditable evidence repository.

Image: Pixabay

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