Ningxia Court in China Mediates a Virtual Currency Entrusted Investment Dispute Case

BlockBeats News, on April 2nd, the Xingqing District Court in Ningxia, China concluded a virtual currency entrusted investment dispute case. The plaintiff, Mr. Wei, entrusted the defendants, Mr. Li and Ms. Hu, to invest in virtual currency. Due to an urgent need for funds and unsuccessful refund request, he sued on the grounds of "unjust enrichment."

After review, the court found a deviation between the cause of action and the actual legal relationship, and took the initiative to explain the legal risks, guiding the parties to correctly understand the legal nature of the entrustment contract relationship. In the end, the plaintiff withdrew the lawsuit against Ms. Hu, Mr. Li returned the investment principal, and the two parties reached a settlement.

During the mediation, the presiding judge explained the litigation risks to the plaintiff, believing that the fundamental legal relationship in this case should be an entrustment contract relationship. Based on the existing evidence, continuing the litigation on the grounds of unjust enrichment would carry a high risk of defeat. If the plaintiff loses this time, he will need to collect evidence separately and initiate a new lawsuit for entrustment contract disputes, which will consume a significant amount of time and energy. At the same time, the judge also analyzed the pros and cons to the defendants: Although the current cause of action filed by the plaintiff is unjust, there is indeed a genuine entrustment investment relationship between the two parties, and the plaintiff's request for a refund is based on corresponding facts. If the case proceeds to a litigation of the entrustment contract dispute, depending on the evidence, the defendants are highly likely to bear the refund responsibility.

The judge reminded: According to the Supreme Court's judicial opinion, the entrustment investment virtual currency contract is an invalid contract (signed after September 4, 2017), and losses are shared based on the degree of fault. Investors need to accurately choose legal relationship claims to assert their rights and reduce litigation risks. (The Paper News)