According to a new report, a Chinese court ruled earlier this month that a Bitcoin (BTC), mining contract was invalid.
A civil case brought by a crypto-related company was dismissed earlier this month by Beijing’s Chaoyang District People’s Court. This claim was made by a client of the latter, who claimed that a contract related to mining hardware had been breached. It dates back to May 2019. This case was pre-dating the crypto crackdown and the claimant demanded BTC 278 (USD14m) in damages for what it claimed was an unpaid bill. The court rejected the case because of the timing.
The court stated that although the companies knew of the inherent risks and environmental damage associated with bitcoin, they had signed the contract anyway. This means that they are responsible for the outcome of the case, and not the judiciary.
According to the 21 Century Business Herald ( via sina), similar decisions have been made by other courts in the past. According to the report’s author, a civil case between Peng and Ma took place in 2018. The court heard from Ma that he had made several bank transfers to Peng during the December 2017-February 2018 period. Peng was apparently his trust to make crypto-related investments for him. Ma concluded that Peng was cheating him and brought the matter to court.
Peng was eventually exposed to have been using an overseas platform. This in turn led to Peng being exposed as a complex pyramid scheme.
There were a number of legal hearings, but the court decided that the platform could not be registered in China. Perhaps more important, the court determined that Peng was responsible, but Ma had acted in good faith, knowing of the risks of investing in crypto. It determined that Peng should shoulder 40% of the financial loss, while Peng would pay the remainder “based on the level of fault both parties had committed”.
A civil case between several individuals and a domestic cryptocurrency wallet operator was dismissed by a Guangzhou court in August 2021. The claimants claimed that they purchased tokens using BTC and Ethereum (ETH) from the defendant’s platform but were later unable to withdraw the funds.
According to the report, the lawyers for the claimants had produced a lot of evidence including transaction records and screenshots, but the court was not impressed.
It stated that parties should “abide by laws and regulations”, respect social ethics, and not disturb the economic and social order. It also claimed that illegal debt was not protected by law and that tokens were an “illegal object” that could not be protected by the law. The court concluded that investors “should bear the consequences and risks of transactions.”
A court in another case, concerning an unpaid Tether (USDT), debt, ruled that a claim for compensation for crypto-related losses was “unfounded in law” and rejected it.