Cryptocurrency Investment Loss Case Denied By Chinese People’s Court

“The loss caused by entrusting others to invest in digital currency” is your own fault. Chinese Law does not cover cryptocurrency losses.

At the beginning of June 2017, the plaintiff Li said that the defendant Jin is the person in charge of the cryptocurrency DK coin investment project in the Philippines.

The plaintiff, Li, believed that investing in the DK currency project could make money, and remitted a total of 1.8 million yuan to the defendant Jin’s bank account in China, and entrusted the defendant Jin to purchase the mining machine on the DK coin platform.

After receiving the remittance, Jinmou told Li that he purchased 5 mining machines at a price of 360,000 yuan per mining machine. In the same year, Li received four proceeds in June of the same year, totaling 218,340 yuan in income.

At the end of August 2017, Li found that the DK currency network platform that was previously viewable was closed.

In October of the same year, Li asked Jin to return the investment principal unsuccessful. He believed that Jin was engaged in a scam and did not fulfill the duty of care of the trustee, so he appealed to the court.

In order to protect his legitimate rights and interests, the plaintiff Li filed a lawsuit requesting the defendant Jin to return a financial payment of 1.8 million yuan.

The opinion of the court of the first instance 

The court held that illegal debts are not protected by law.

DK currency is a kind of network virtual currency similar to Bitcoin. According to the notices and announcements issued by the People’s Bank of China and other departments, the virtual currency is not the currency issued by the authorities. It does not have monetary assets such as legal and mandatory. It is not true. Currency.

In terms of nature, DK currency is similar to Bitcoin as a specific virtual commodity. It does not have the legal status equivalent to currency. It cannot and should not be used as currency in the market.

The plaintiff in this case invested and commissioned the defendant to invest in the mining machine on the DK currency platform, which was engaged in illegal financial activities, disrupted the national financial order, and its actions should not be protected by law. The losses caused by the plaintiff should be borne by the plaintiff. The plaintiff’s claim for the law was unfounded and therefore was not supported.

Tips :

Illegal engage in banking business activities refers to the following activities undertaken without the approval of the People’s Bank of China, the China Banking Regulatory Commission and the State Administration of Foreign Exchange:

1. Illegal absorption of public deposits or disguise to absorb public deposits; 2. Unlawful fundraising to unspecified objects in society in any name without legal approval; 3. Illegal loan issuance, settlement, discounted bills, capital borrowing, trust investment, Financial leasing, financing guarantees, foreign exchange trading; 4. Other illegal banking business activities recognized by the People’s Bank of China, the China Banking Regulatory Commission and the State Administration of Foreign Exchange.

Illegal securities business activities refer to the following activities without the approval of the CSRC: 1. Securities and futures brokerage; 2. Securities, securities investment funds, futures investment consulting; 3. Securities trading, securities investment activities 4. Financial advisors; 4. Securities underwriting and sponsorship; 5. Securities asset management; 6. Securities investment fundraising and management; 7. Other illegal securities business activities recognized by the CSRC according to law.

Illegal employment in insurance business activities refers to the following activities that are not carried out without the approval of the China Insurance Regulatory Commission: 1. Insurance, reinsurance; 2. Insurance agents; 3. Insurance brokers; 4. Other illegal insurance business activities recognized by the CIRC according to law.

 

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