An investor in Shanghai, China, invested 1.05 million yuan in virtual currency. After encountering platform withdrawal issues, they sued the court for compensation, but the court dismissed their claim.
BlockBeats News, February 13 — The People’s Court of Jing’an District, Shanghai, China, recently heard a case involving an improper profit-taking dispute caused by virtual currency investment. Ms. Wu was persuaded by a live stream host to invest 1.05 million yuan in virtual currency trading. After being unable to withdraw funds from the platform, she filed a lawsuit seeking compensation. However, her claims were dismissed in both the first and second trials, and she was ultimately responsible for bearing all losses herself. This final judgment serves as a warning to all investors who indulge in wishful thinking and blindly engage in virtual currency speculation.
In November 2019, Ms. Wu received a sales call and, under the guidance of a live stream investment host, downloaded a virtual currency trading app. Through this platform, Ms. Wu made successive investments totaling 1.05 million yuan, reaching agreements with eight sellers, including a transaction of 80,000 yuan with Mr. He. Later, Ms. Wu discovered that she could not log into the trading app, and the virtual currency worth 1.05 million yuan in her account on the platform could not be withdrawn.
In 2024, Ms. Wu reported the incident to the local public security authorities and filed a civil lawsuit in court, claiming that Mr. He should return the 80,000 yuan transaction amount on the grounds of improper profit. Mr. He argued that he was a member of a certain digital trading platform, was selling USDT digital currency through order placement, had not registered an account on the platform Ms. Wu referred to, and that the transaction was completed after the funds were received, so there was no improper profit.
After review, the Shanghai Jing’an District People’s Court held that, according to the relevant provisions of the Civil Code of the People’s Republic of China, civil subjects engaging in civil activities must not violate laws or violate public order and good morals. In this case, the USDT involved is a virtual currency, which does not have the same legal status as legal tender. Activities related to virtual currency are considered illegal financial activities. Ms. Wu’s investment transactions involve virtual currency-related business activities, and trading virtual currency disrupts the national financial regulatory order, violating public order and good morals, and constitutes an invalid civil legal act. The losses arising from this should be borne by her alone. In conclusion, the Jing’an District People’s Court dismissed all claims filed by plaintiff Ms. Wu. Dissatisfied with the judgment, Ms. Wu appealed. After review, the second-instance court dismissed the appeal and upheld the original ruling.
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