I entrusted someone else to speculate in cryptocurrencies and lost 100,000 yuan. Why was the lawsuit in court rejected?

Being promised a high return, he gave the other party 100,000 yuan to invest in the virtual currency "Ethereum", but in the end he lost everything...Recently, the People's Court of Nanjing Jiangbei New District made a judgment on this dispute case and rejected the plaintiff's lawsuit request for the other party to return 100,000 yuan and interest.

In this regard, the presiding judge reminded that my country has expressly prohibited virtual currency transactions, and this type of entrusted financial management behavior is not protected by law in my country, and the consequences can only be borne by the individual.

The lawsuit of "cryptocurrency speculation" was dismissed by the court

In the past two years, the trend of "speculating on cryptocurrencies" has emerged. Li recommended Ethereum to Wang through WeChat many times, promising that this virtual currency can be traded on the official website, and can also appreciate and be withdrawn, and invited Wang to participate in offline exchange activities. Wang was tempted and paid 100,000 yuan to Li and others in succession, and gave the set password to Li, asking Li to operate on the Ethereum website.

After the deadline promised by Li expired, Wang urged him to withdraw the money several times. However, Li said that the website could not be logged in normally, the transaction time was uncertain, and the withdrawal could not be made temporarily. In the end, Wang lost all the 100,000 yuan he invested. Wang sued Li to the Jiangbei New District Court on the grounds of a dispute over the entrusted financial management contract, demanding that he return the 100,000 yuan and interest.

After trial, the court held that there was a commission contract relationship between Wang and Li, but Wang's funds were used to purchase virtual currency. According to the "Notice on Preventing the Risks of Token Issuance and Financing" issued by the People's Bank of China, virtual currency does not have monetary attributes such as legal compensation and compulsion, nor does it have the same legal status as currency, and should not and cannot be circulated and used as currency in the market. Therefore, Li's so-called entrusted financial management behavior is not protected by law in my country, and the legal consequences should be borne by him.

In the end, the Jiangbei New District Court made a judgment and rejected Wang's lawsuit.

Judge: Virtual currency transactions are considered illegal fundraising

Xia Wenhao, a judge of Jiangbei New District Court, introduced that on January 26, 2021, the State Council promulgated the "Regulations on Preventing and Dealing with Illegal Fund Raising", Article 25 of which stipulates that the losses incurred due to participation in illegal fund raising shall be borne by the fund raising participants themselves. On May 18, the China Internet Finance Association, the China Banking Association, and the China Payment and Clearing Association jointly issued the "Announcement on Preventing the Risk of Speculation in Virtual Currency Transactions", which clearly mentioned that virtual currency is a specific virtual commodity, and it is a violation of relevant laws and regulations to carry out the exchange of legal currency and virtual currency and the exchange of virtual currency between virtual currencies. Virtual currency transaction contracts are not protected by law, and the consequences and losses caused by investment transactions shall be borne by the relevant parties themselves. In September 2017, the People's Bank of China and five other ministries and commissions jointly issued the "Announcement on Preventing the Risks of Token Issuance and Financing", which clearly prohibits token issuance and financing, prohibits the exchange of virtual currencies on token financing trading platforms, and other businesses.

Xia Wenhao said that from the above legal provisions, it can be seen that my country has expressly prohibited the transaction of virtual currency and has identified it as an illegal fund-raising activity. The main reason is that virtual currency is not legal tender. Such investment is likely to lead to illegal and criminal activities such as pyramid schemes, fraud, illegal absorption of public deposits, and fund-raising fraud, causing great social harm and seriously damaging the financial order.

"Investors need to be cautious about the promotion of high interest rates and high returns of virtual currencies, otherwise the consequences of losses will be borne by the investors themselves." Xia Wenhao reminded that when citizens participate in various investments, they need to go to formal financial institutions and financial venues, sign standardized investment and financial management contracts, take risk prevention measures, and protect the safety of personal property.

Correspondent Ning Faxuan Yangzi Evening News/Ziniu News reporter Wan Chengyuan