Local media revealed that the drop in cryptocurrency prices in recent months is the main reason behind the significantly increased number of crypto-related disputes Chinese courts have been challenged to resolve. Apparently, restrictions in the People’s Republic are sometimes implemented without an official mandate, adding to it the ambiguity of the government-imposed crypto ban.
Data released by the Chinese judiciary revealed that as of the first week of August, there were 274 pending legal cases related to cryptocurrency. China Money Network reported that 126 out of the 274 were criminal cases that involved mostly property and economic crimes. 107 were civil cases about breach of contract and mismanagement, and two were administrative cases.
Since many of the cases involve cryptocurrency trading, Chinese Courts have difficulties ruling, the reason being that judges cannot determine with accuracy how legal these economic activities really are. The ban imposed last year by Beijing authorities prohibited token sales and the exchange of digital coins with the national fiat, yuan. According to the Hong Kong-based CMN, the trading ban was not explicitly mentioned in official statements.
There is a report on a dispute between a Chinese cryptocurrency exchange and one of its users in which the ruling did not even comment on the legality of digital asset trading. The report states that the platform Coinnice accidentally sent 5 BTC to its client’s wallet during a system upgrade. He withdrew the cryptos, sold them, and later refused to refund the exchange insisting on the fact that bitcoin trading with RMB is illegal in China and accusing Coinnice of committing a criminal offense.
The court treated the dispute as a civil case and ruled it following contract laws. The court also determined that the defendant’s successful registration, with his real name and with his bank account, prove that he consented to Coinnice’s service agreement. The court then decided that both parties should perform their obligations under their contract. The client was obliged to compensate the exchange for its losses.