Chinese Court Dismisses Crypto Lawsuit, Reaffirms Crypto Ban

• A Chinese investor allegedly lost 1.78 million yuan while trying to invest in Tether’s USDT.
• The court dismissed the lawsuit, ruling the investor to bear the loss as he had no legal evidence.
• The judge reinforces China’s approach to crypto, asserting that crypto cannot exercise legal currency status.

Amid the ongoing debate over China’s stance on cryptocurrencies, the East Asian nation has once again made its position clear. A recent ruling by the Wuhan Donghu New Technology Development Zone People’s Court in Hubei Province dismissed a crypto investment lawsuit, leaving the investor to shoulder the loss. This decision serves as a stark reminder of China’s strict regulations against digital assets.

The plaintiff, Liu, began investing in crypto in 2020, allegedly at the urging of his colleague Wang. Liu claims he sent 1.84 million yuan to Wang and his third-party account using various payment methods from December 2020 to October 2022. While Liu meant to invest in Tether’s USDT stablecoin, he only got 56,000 yuan back from Wang during that period.

When the crypto purchasing website shut down and Liu could not recover his substantial losses, he filed a lawsuit. He argued there was no real agreement with Wang and demanded 1.78 million yuan in compensation.

Wang countered Liu’s claims, stating the investments were through his personal account and it was an investment relationship with the website, not between two entities. He insisted he did not advise or push Liu to invest in USDT, and also highlighted inconsistencies in Liu’s claims.

With no evidence to support his case, the court rejected Liu’s request. The judge emphasized China’s firm stance on cryptocurrencies, highlighting the strict regulations and outright bans. He clarified that virtual assets don’t have the same legal standing as traditional currency. Cryptocurrencies, issued by non-monetary authorities, aren’t legal tender and can’t be used as currency, the judge explained.