The High Court of China’s Shandong Province has dismissed the cryptocurrency investment lawsuit, warning that there is no legal status for cryptoassets in the country.
According to the South China Morning Post (SCMP), this is an appeal against the ruling of the Jinan Intermediate Court filed by a local resident in January this year. The plaintiff lost 70,000 yuan (about $ 10,750) by investing in cryptocurrencies in 2017 on the advice of friends. After the People’s Bank of China banned financial institutions from serving cryptocurrency transactions in 2018, the plaintiff’s accounts were closed, resulting in the loss of digital assets.
In January 2021, a Jinan court ruled that the fraud charge filed by an investor against the issuers of cryptoassets was unfounded as cryptocurrencies do not have legal status in the country. This means that cryptocurrency investors cannot count on legal protection. In March, the plaintiff appealed against the court’s decision, but the judge did not change the verdict.
This weekend, the Shandong High Court dismissed yet another appeal by the plaintiff, explaining that “investment in cryptocurrencies and trading in digital assets are not protected by law.” The court’s decision is consistent with the position of other provincial courts in China. For example, last year a Fujian provincial court also dismissed a cryptocurrency case on the grounds that virtual commodities are not protected by Chinese law.
However, earlier, the Shanghai Intermediate People’s Court ruled that a certain married couple should receive compensation for stealing their bitcoins. This echoes the 2018 China Arbitration Court ruling. He recognized the need for legal protection of bitcoin as a property with economic value.
Despite this, the decision made by the Shandong High Court could set a legal precedent with negative implications for crypto users in China. This may be due to the tightening of the Chinese authorities in relation to mining and digital asset trading.
In July, the People’s Bank of China’s Business Administration Department and the Beijing Finance Bureau shut down a cryptocurrency trading software firm. In addition, the People’s Bank of China recently announced that it will continue to exert regulatory pressure on the industry.
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