Purchase of virtual currency leads to dispute, Shandong court in China rules contract invalid

BlockBeats reported that on September 13, The Paper reported that the Shanghe County People's Court recently concluded a contract dispute involving "virtual currency" as a financial management object, and the court finally ruled to dismiss the plaintiff Wang's lawsuit.

Last October, a lecture on investment was held in a county town, and the content of the lecture was to buy virtual currency U coins on a certain platform. Chen believed that the investment could be made at any time. After Zhang, an outsider, provided him with Wang's bank account, Chen transferred more than 70,000 yuan to Wang's account, and Wang bought 10,000 U coins.

Zhang installed a trading software on Chen's mobile phone, and Wang transferred 10,000 U coins to Chen's account. But later, when the software was opened, the asset data showed zero. Chen believed that Wang's acquisition of more than 70,000 yuan was an unjust enrichment, which harmed his own interests, so he filed a lawsuit with the court, demanding that Wang return the more than 70,000 yuan of currency purchase money and pay interest.

Regarding the cause of action in this case, Chen claimed that Wang should return the unjust enrichment money, but according to the consistent statements of both parties, Chen's transfer to Wang was based on Chen's correct intention, not that Wang obtained unjust benefits without legal basis, so this case does not belong to unjust enrichment disputes. This case is a dispute caused by the purchase of U coins on behalf of each other after the two parties reached a consensus, so it should be determined as a contractual dispute.

After trial, the court held that Article 8 of the Civil Code of the People's Republic of China stipulates that civil subjects shall not violate the law or violate public order and good customs when engaging in civil activities. The "U" coin in this case is a network virtual currency similar to Bitcoin. According to the "Notice on Preventing Bitcoin Risks" and "Announcement on Preventing Token Issuance and Financing Risks" issued by the People's Bank of China and other departments, virtual currency is not issued by the monetary authority, does not have monetary attributes such as legal compensation and compulsion, and is not a real currency.

The U coin in this case is a virtual currency that does not have the same legal status as currency, and the investment and sale of U coins are not protected by law. Influenced by the content of the lecture, Chen transferred the money to Wang's account to buy U coins. After Wang purchased U coins, he deposited them into Chen's account on a certain platform, and a contractual relationship was formed between the two parties to buy U coins on behalf of Wang. According to the above provisions, the contractual relationship between the two parties is invalid, and Chen shall bear the losses incurred by him. Therefore, the court ruled to dismiss all of Chen's claims.

The judge said that virtual currency does not have monetary attributes such as legal compensation and compulsion, does not have the same legal status as legal currency, and cannot and should not be circulated and used as currency in the market. Virtual currency-related business activities are illegal financial activities. Overseas virtual currency exchanges providing services to domestic residents through the Internet are also illegal financial activities. There are legal risks in participating in virtual currency investment and trading activities. Any legal person, non-legal person organization or natural person who invests in virtual currency and related derivatives and violates public order and good morals will have the relevant civil legal acts invalid.