New progress in Bitcoin "mining" case: Sichuan Provincial Development and Reform Commission adopted the court's judicial suggestions to investigate and clean up multiple "mining farms"

A reporter learned today from the Chaoyang District People's Court of Beijing that the Sichuan Provincial Development and Reform Commission recently replied to the court, stating that it had organized relevant cities (prefectures) to carry out a cleanup and investigation of virtual currency "mining" activities in key areas and enterprises in early 2022, demolished a number of virtual currency "mines", and severely cracked down on virtual currency "mining" and trading activities.

On December 15, 2021, the Chaoyang District People's Court of Beijing held a public hearing and pronounced a verdict on a service contract dispute caused by the delay in the return of Bitcoin "mining". After the verdict, the Chaoyang Court sent a letter to the Sichuan Provincial Development and Reform Commission to provide feedback on the clues of the virtual currency "mining" activities involved in the case.

Many "mines" were cleared

In this case, Fengfu Jiuxin Company signed a contract with Zhongyan Zhichuang Company, entrusting Zhongyan Zhichuang Company to purchase and manage micro storage space servers (i.e. "mining machines"), carry out Bitcoin mining activities and pay the proceeds. During the performance of the contract, Zhongyan Zhichuang Company only paid Fengfu Jiuxin Company 18.3463 Bitcoins, and did not pay other proceeds thereafter. After Fengfu Jiuxin Company repeatedly demanded payment without success, it sued the court, requesting the court to order Zhongyan Zhichuang Company to deliver 278.1654976 Bitcoins, and at the same time compensate for the loss of occupying the micro storage space servers after the service expired.

After trial, Chaoyang Court held that the "mining" activities involved in the case consume a lot of energy and emit a lot of carbon, which is not conducive to China's industrial structure optimization, energy conservation and emission reduction, and is not conducive to China's carbon peak and carbon neutrality goals. In addition, the risks of false assets, business failure, investment speculation and other risks derived from the production and trading of virtual currencies are prominent, which are detrimental to the public interest. Fengfu Jiuxin Company and Zhongyan Zhichuang Company signed a "mining" agreement on behalf of others, knowing that there are risks in "mining" and Bitcoin transactions, and the relevant departments clearly prohibit Bitcoin-related transactions. This agreement should be invalid, and the related property rights and interests generated by it should not be protected by law. The consequences of the above-mentioned behavior should be borne by the parties themselves. In the end, the court determined that the contract between the two parties was invalid and ruled to dismiss all the claims of Fengfu Jiuxin Company.

After the verdict was announced, the Chaoyang Court sent a judicial recommendation to the Sichuan Provincial Development and Reform Commission, suggesting that the Bitcoin "mining" projects involved in this case be investigated, and that the companies involved be prohibited from continuing to engage in "mining" activities . At the same time, the "mines" involved and other local virtual currency "mining" projects be investigated and cleaned up and rectified.

After receiving the judicial suggestion from Chaoyang Court, the Sichuan Provincial Development and Reform Commission attached great importance to it and investigated and monitored the main company of the "mine" involved in the case. It is reported that the company is entrusting a third party to carry out the company deregistration work and handle the final work of the previous "mining" activities. It is expected to complete the deregistration in May 2022. In addition, the Sichuan Provincial Development and Reform Commission immediately sent a letter to the Liangshan Prefecture Development and Reform Commission, requesting a cleanup and investigation of virtual currency "mining" activities in relevant areas and enterprises.

Recently, the Sichuan Provincial Development and Reform Commission wrote back to the Beijing Chaoyang Court and provided feedback on the cleanup and investigation work. As of January 6, 2022, the concentrated virtual currency "mining" sites in the Shuiluo River and Muli River basins in Liangshan Prefecture, Sichuan Province, where the virtual currency "mining" projects involved were located, have all stopped "mining" activities, the equipment has been cleaned up, and the factory buildings are also being demolished.

"Through the trial of this case, we have effectively promoted the rectification of virtual currency 'mining' activities and achieved the unity of the political, legal and social effects of the case." Li Zenghui, the presiding judge of the case, said, "The blind and disorderly development of virtual currency 'mining' activities has an adverse impact on promoting high-quality economic and social development and energy conservation and emission reduction. Comprehensively rectifying virtual currency 'mining' activities is of great significance to promoting the optimization of my country's industrial structure, promoting energy conservation and emission reduction, and achieving carbon peak and carbon neutrality goals as scheduled."