A cryptocurrency investor in Shanghai, China, filed a lawsuit seeking compensation after being unable to withdraw funds from the platform, but the court rejected the claim

BlockBeats News, February 13, the Jing'an District People's Court of Shanghai, China recently heard a case of unjust enrichment arising from investing in cryptocurrency.

Ms. Wu was induced by a live stream anchor to invest 1.05 million yuan in cryptocurrency trading. After encountering the platform's inability to withdraw, she sued for compensation. However, her claims were rejected in both the first and second instances, and she ultimately had to bear all the losses.

In November 2019, Ms. Wu received a sales call and, guided by a financial management anchor in a live stream, downloaded a cryptocurrency trading app. Through this trading platform, Ms. Wu invested a total of 1.05 million yuan, conducting transactions with 8 sellers, with an 80,000 yuan transaction with Mr. He. Later, Ms. Wu found that she couldn't log in to the trading app and couldn't withdraw the 1.05 million yuan worth of cryptocurrency in her account.

In 2024, while Ms. Wu reported the case to the local public security agency, she also filed a civil lawsuit with the court on the grounds of unjust enrichment, demanding that Mr. He return the transaction amount of 80,000 yuan. However, Mr. He argued that he was a member of a certain digital exchange, placed an order to sell the cryptocurrency USDT, never registered the platform account mentioned by Ms. Wu, and that after the funds were received, both parties had completed the transaction, with no unjust enrichment involved.

After hearing the case, the Jing'an District People's Court of Shanghai held that, according to the relevant provisions of the Civil Code of the People's Republic of China, when civil subjects engage in civil activities, they must not violate the law or public order and good customs. In this case, the USDT involved is a type of cryptocurrency, which does not have the same legal status as legal tender. The relevant business activities of cryptocurrency belong to illegal financial activities. Ms. Wu's investment transaction involved activities related to cryptocurrency, which disrupted the country's financial regulatory order, violated public order and good customs, constituted an invalid civil legal act, and she should bear the resulting losses on her own. Therefore, the Jing'an District People's Court rejected all of the plaintiff Ms. Wu's claims. Ms. Wu was dissatisfied with the judgment and appealed. After trial, the second-instance court rejected the appeal and upheld the original judgment. (Huaxia Times)