The Chinese legal industry has disputes over crypto, especially between Shanghai And Shandong
According to a report from Weixin, based on a statement by China Shandong High Court, cryptocurrency is not issued by a currency-issuing agency, has no monetary properties, and should not be used as currency in the market. Therefore, citizens’ investments and trading of crypto are not protected by law.
China’s stance on crypto is conflicting
This statement comes from a lawsuit between Ma Moumou and three others, Liu Moumou, Chang Moumou, and Li Moumou, to the People’s Court of Licheng District, Jinan City. Accordingly, Ma was introduced by the three aforementioned people to invest in the Wilo International Encrypted Digital Currency Project (Wilo Coin project) with an amount of up to seven thousand yuan ($10,800.80) and signed the “Agreement” on December 24, 2017. According to the “Agreement,” Ma requested that they compensate him for the above amount, each paying 23,333 yuan (equivalent to $3,600).
However, according to the three defendants, the “Agreement” that Ma signed was not a contract in the legal sense. Liu, Chang, and Li Moumou kindly offered favors, and the rights and obligations of the contract were not equal. Even if it is recognized as a contractual relationship, it cannot prove that Ma has suffered losses. The investment in the Wilo Coin project is only to suspend the service in the jurisdiction, so Ma’s so-called loss is impossible to talk about, and the suspension does not represent a loss.
Even if it is determined to be a contract behavior, Ma’s behavior is an investment behavior, and the risk should be borne by himself. In addition, the suspension due to policy reasons is a force majeure exemption, and Liu and Chang should be exempted from corresponding liabilities.
“On the day we signed the agreement with Ma Moumou, Ma did not invest in the Wilo Coin project. I don’t know when Ma invested. I asked him to provide written proof of investing in the Wilo Coin, but he didn’t”, the defendant Li Moumou argued that.
After the trial, the People’s Court of Licheng District, Jinan City, found that Ma voluntarily invested in the Wilo Coin project. Therefore, he must be held responsible for his loss. So, they issued a civil judgment: dismissed Ma’s claims.
The court’s decision is not necessarily a self-judgment because it is hostile to crypto. Because, according to article 8 of the “Civil Code of the People’s Republic of China,” civil entities engaged in civil activities must not violate the law or violate public order and good customs.
Furthermore, Ma is considered to have signed an investment trust agreement with the above three defendants and this contract is not protected by law. The consequences of Ma’s purchase of Wilo Coins shall be borne by him. Therefore, the court did not support Ma’s litigation request.
In this case, the Wilo Coin project is a cryptocurrency (virtual currency, as they said) similar to Bitcoin. According to the notices and announcements issued by the People’s Bank of China and other departments, virtual currency is not issued by a currency-issuing agency, has no monetary properties such as legal compensation and compulsion, is not a currency in the true sense, does not have the same legal status as a currency, and cannot and should not be used as currency in the market. Citizens’ investment and trading of virtual currencies are not protected by law.
In terms of nature, Wilo Coin does not have the same legal status as a currency and cannot and should not be used as currency in the market. It is illegal for citizens to invest and trade cryptocurrency and is not protected by law.
However, this ruling is in conflict with another previous ruling of the Shanghai courts. The story is similar, but the Shanghai court is somewhat in favor of Bitcoin, as AZCoin News reported. According to the Minhang District Court in Shanghai, Bitcoin is a digital property protected by Chinese law. But, investing in crypto is not protected by Chinese law, the high court of Shandong province stated as mention above. This shows that the Chinese legal industry has negotiated over cryptocurrencies.
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