A recent court case in China highlights the ongoing legal challenges surrounding the trading and use of cryptocurrencies. In November, the People’s Court of Jiahe County, Hunan Province, ruled on a dispute involving a Bitcoin miner transaction. The plaintiff, Pan, had exchanged messages with the defendant, Lei, via WeChat in November 2021, agreeing to purchase a Bitcoin miner S19XP for a total price of 23.678 million USDT.
However, the two parties disagreed on the nature of the contract and the settlement price. Pan requested that the defendant return 6.27 million USDT and deliver 149 additional mining machines. The court dismissed all of the plaintiff’s claims, stating that virtual currencies such as USDT do not have legal tender status in China, and related transactions are deemed illegal financial activities.
Additionally, the court cited the National Development and Reform Commission’s notice on “Rectifying the ‘Mining’ of Virtual Currency,” which states that mining activities consume a lot of energy, have high carbon emissions, low economic contribution, and do not align with the country’s green development strategy.
As a result of these violations of laws and regulations, as well as public order and good customs, the court determined that the transaction contract was invalid. Both parties are responsible for the losses incurred from the transaction. This case highlights the ongoing legal challenges faced by those involved in the cryptocurrency market in China.