July 21, 2024
China's Crypto Legal Landscape: Second Court Ruling Highlights Ambiguities
Policy & Regulation

China’s Crypto Legal Landscape: Second Court Ruling Highlights Ambiguities

According to a second Chinese court, lending cryptocurrency is an activity that is not subject to the jurisdiction of the national legal system.

An aggregate of 80,000 Tether (USDT) was provided to Mr. Gang by Mr. Ming in April 2021 for the goal of stablecoin trading, according to a news statement issued by the Nanchang People’s Court on October 10. The loan had a six-month repayment period. However, Mr. Gang didn’t pay back the loan, which prompted Mr. Ming to file a lawsuit against his counterpart in the Nanchang People Court.

The Nanchang People’s Court, citing many laws that makeup China’s Crypto Ban, declared in its historic ruling this week that Mr Ming was required to demonstrate that Tether is a lawfully issued fiat currency to pursue a valid cause of action for judicial relief. The Nanchang People’s Court decided that the case did not fit within the proper scope of civil action since Mr Ming was unable to do so. After that, Mr. Ming filed an appeal against the judgment, which was also denied.

“There are legal risks involved in participating in virtual currency investment and trading activities. If any legal person, unincorporated organization, or natural person invests in virtual currencies and related derivatives that violate public order and good customs, the relevant civil legal actions will be invalid, and the resulting losses shall be borne by them.”

Nanchang People’s Court

Since the end of 2021, cryptocurrencies have been outlawed in China due to a lack of regulation and environmental concerns. In a different decision from August, the Changzhou Zhonglu People’s Court nullified a $10 million Bitcoin loan arrangement, finding that the lender lacked legal recourse in the event of the borrower’s failure because using cryptocurrency is illegal in the nation.

Image: Freepik

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