Source: Lawyer Liu Yang
On February 27, 2024, the Supreme People's Court held a press conference to announce that the People's Court case database was officially launched and open to the public. The public can view it after registering and logging in. The URL of the People's Court Case Library is: www.rmfyalk.court.gov.cn. You can also click on the "People's Court Case Library" icon on the homepage of the official website of the Supreme People's Court to enter directly. Up to now, the People's Court case database has included 3,711 cases. Lawyer Liu Yang sorted out and summarized all cases on virtual digital currency by searching for keywords related to virtual currency. There were a total of 6 civil, commercial and administrative cases, 5 of which were civil and commercial cases, mostly involving contract validity issues with mining machines and virtual currency as the subject matter, the court The basic attitude is that the contract is invalid because the subject matter involved violates mandatory regulations and public order and good customs.
Civil and commercial cases:
Case 1: A company in Shanghai v. a computing technology company in Beijing, entrustment contract dispute case: Bit Judicial determination of the effectiveness of currency "mining"
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[Reason for the referee]
< p>The court’s effective judgment held that the focus of the dispute in this case was the identification of the nature, effectiveness evaluation and liability of the mining activities involved.
1. The nature of the mining behavior involved in the case
Bitcoin is a virtual electronic currency calculated through a specific computer program. It is an open source program that combines the open source software engineering model, cryptography principles and workload proof mechanism with the characteristics of decentralization, limited total amount, no geographical restrictions on use and anonymity. Each participant has the opportunity to obtain a certain number of Bitcoins as a reward when successfully executing a specific algorithm. The method of obtaining Bitcoins through this method is called "mining."
On December 3, 2013, five departments including the People's Bank of China jointly issued the "Notice on Preventing Bitcoin Risks." The notice pointed out: In terms of nature, Bitcoin should be a specific virtual commodity that does not have the same legal status as currency. It cannot and should not be used as currency for circulation in the market. Financial institutions and payment institutions are not allowed to carry out activities related to Bitcoin-related businesses, various departments, financial institutions, and payment institutions... strengthen the education of the public on currency knowledge, and will... correctly view concepts such as virtual goods and virtual currencies, rational investment, reasonable control of investment risks, and maintenance of their own property security. Incorporate the content of financial knowledge popularization activities to guide the public to establish correct currency concepts and investment concepts. Article 127 of the Civil Code of the People's Republic of China, which came into effect on January 1, 2021, stipulates that if the law has provisions for the protection of data and network virtual property, those provisions shall prevail. However, there are currently no laws that provide specific provisions on virtual commodities such as Bitcoin. Therefore, to determine the nature of Bitcoin and Bitcoin mining activities, this court jointly issued the "Regulations on Preventing Bitcoin Risks" and the above-mentioned five departments including the People's Bank of China. The spirit of the Notice maintains the same understanding, that is, Bitcoin is a specific virtual commodity, and Bitcoin mining activities are related investment activities that obtain the virtual commodity Bitcoin through certain equipment and behaviors. In this case, neither the original nor the defendant had any objection to the Bitcoin mining activities. Before the ownership of the 685 servers (mining machines) involved in the case belonged to the defendant, the defendant provided corresponding technical services and infrastructure services and was responsible for the management and maintenance of the plaintiff's custody. The 685 mining machines carried out mining activities, the plaintiff paid the corresponding fees, and the bitcoins obtained from mining were delivered to the plaintiff. Based on this, from a formal point of view, a comprehensive contractual relationship with entrustment and service characteristics has been formed between the plaintiff and the defendant. However, in essence, the mining activity is a venture capital activity for the plaintiff to pursue Bitcoin harvest. Investors must Bear the relevant investment risks at your own risk.
2. Evaluation of the effectiveness of the mining behavior involved in the case
Article 9 of the "Civil Code of the People's Republic of China" stipulates that civil subjects engaging in civil activities shall It is conducive to saving resources and protecting the ecological environment. Bitcoin mining activities consume huge amounts of electricity and energy, which is not conducive to high-quality development, energy conservation and emission reduction, as well as the realization of carbon peak and carbon neutrality. In addition, the derivative risks in the production and transaction of virtual currencies, including Bitcoin, are prominent and have become a speculative tool, posing potential risks that threaten national financial security and social stability. On May 21, 2021, the 51st meeting of the Financial Stability and Development Committee of the State Council called for cracking down on Bitcoin mining and trading. On September 3, 2021, eleven departments including the National Development and Reform Commission and the People's Bank of China issued the "Notice on Rectifying Virtual Currency "Mining" Activities", which listed virtual currency mining activities as a phased-out industry and prohibited them in accordance with relevant regulations. invest. Article 19 of the State Council's "Interim Provisions on Promoting Industrial Structural Adjustment" stipulates that investment in phased-out projects is prohibited. In summary, the behavior and relationship between the plaintiff and the defendant regarding the custody and maintenance of mining machines and the conduct of Bitcoin mining activities are contrary to the spirit of Article 9 of the Civil Code of the People's Republic of China and are inconsistent with the industrial structure. Adjusting the mandatory provisions and regulatory requirements of relevant administrative regulations violates public order and good customs, and the court will negatively evaluate its effectiveness in accordance with the law. The defendant's argument that the contract is invalid shall be accepted.
3. Liability for mining activities involved in the case
Based on the above discussion, Bitcoin mining activities are risk investment activities. The policy risks, technical risks, etc. arising from the activities and the risks of investment losses caused by them shall be borne by the investors themselves. In this case, the plaintiff and defendant were at fault for invalidating the contract for hosting and maintaining mining machines and conducting Bitcoin mining activities, and all parties are responsible for the consequences.
In addition, it should be pointed out that the plaintiff in this case claimed that the defendant had defaulted on power outages during the custody and maintenance of the mining machines involved in the case, and claimed compensation for the Bitcoin losses during the power outage. Among them, the plaintiff claimed that the defendant breached the contract and cut off power for 107 days, but the notarial certificate and other evidence provided by it were insufficient to prove this claim. During the trial, both the plaintiff and the defendant admitted that the loss of computing power and the loss of Bitcoin lacked relevant standards, and it was impossible to calculate precise figures. Therefore, even if there was a 107-day power outage, it was impossible to calculate the specific number of Bitcoins that could be produced during that period. . The so-called Bitcoin losses claimed by the plaintiff during this period were calculated based on the compensation standard in the "Explanatory Letter" issued by the defendant to the plaintiff on July 21, 2020, which lacks objectivity and direct factual basis.
[Referee’s Points]
1. Bitcoin is a virtual commodity. Bitcoin "mining" refers to the process of finding specific random numbers through calculations. To understand "mining" behavior, we should penetrate the superficial forms of "mining" related contract groups such as entrustment, cooperation, and services, and grasp the risk investment attributes of "mining" activities of "investing costs and pursuing returns", so as to "invest in Bitcoin". "Mining" is defined as a venture capital activity that pursues returns from virtual commodities.
2. Bitcoin "mining" activities have violated the "Interim Provisions on Promoting Industrial Structural Adjustment" and are obsolete industries that are prohibited from investment by administrative regulations. The power energy it consumes and the speculation risks it causes are different from "mining" If the contribution of the results to the national economy does not match, it should be regarded as an invalid behavior that violates public order and good customs.
Case 2: Guiding Case No. 199: Gao Zheyu and Shenzhen Yunsi Road Innovation Development Fund Company and Li Bin applied for the revocation of the arbitration award
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[Reasons for Judgment]
The effective judgment of the court held that: "The People's Bank of China, Ministry of Industry and Information Technology, China Banking Regulatory Commission, China Securities Regulatory Commission The China Insurance Regulatory Commission’s Notice on Preventing Bitcoin Risks (Yinfa [2013] No. 289) clearly stipulates that Bitcoin does not have the same legal status as currency and cannot and should not be used as currency in the market. In 2017, seven ministries and commissions including the People's Bank of China jointly issued an announcement on preventing the financing risks of token issuance, which reiterated the above regulations and further proposed that any so-called token financing trading platform shall not engage in legal currency and token transactions from the perspective of preventing financial risks. , exchange business between virtual currencies, shall not buy or sell tokens or virtual currencies as a central counterparty, shall not provide pricing, information intermediary and other services for tokens or virtual currencies. The above-mentioned documents essentially prohibit the redemption, transaction and circulation of Bitcoin, and speculation in Bitcoin is suspected of engaging in illegal financial activities, disrupting financial order and affecting financial stability. The arbitration award involved in the case ruled that Gao Zheyu compensated Li Bin with U.S. dollars equivalent to Bitcoin, and then converted U.S. dollars into RMB. In essence, it supported the payment and transactions between Bitcoin and legal tender in disguise. It was inconsistent with the spirit of the above-mentioned documents and violated the public interests of society. , the arbitration award shall be revoked.
[Judge Points]
The arbitral award ruled that the respondent should compensate US dollars equivalent to Bitcoin and then convert US dollars into RMB, which is disguised support. The redemption transaction between Bitcoin and legal currency violates the state's regulations on financial supervision of virtual currencies and goes against social and public interests. The People's Court should rule to revoke the arbitration award.
Case 3: Wang v. Chen Sales Contract Dispute: Validity and Legal Consequences of the “Mining Machine” Sales Contract
https://rmfyalk. court.gov.cn/dist/view/content.html?id=X0UcRyr0RYqKb6hOnrld6%252Bcxx73EJ0DPwTK%252FqFaaW6U%253D&lib=ck&qw=%E6%AF%94%E7%89%B9%E5%B8%81
[Reasons for Judgment]
The effective judgment of the court held that: First, regarding the validity of the sales agreement. Article 153 of the Civil Code stipulates: "Civil legal acts that violate the mandatory provisions of laws and administrative regulations are invalid. However, except where the mandatory provisions do not render the civil legal acts invalid. Civil legal acts that violate public order and good customs The act is invalid." Article 9 of the "Civil Code" stipulates: "Civil subjects engaging in civil activities shall be conducive to saving resources and protecting the ecological environment." The transaction of "mining machines" involved by both parties in this case is actually "mining" on the Internet. Special computer equipment (for mining “Bitcoin”). Wang purchased a “mining machine” with the purpose of calculating and producing virtual currency by purchasing a special “mining machine”; this type of “mining” activity consumes a lot of energy and carbon emissions. It is not conducive to the optimization of the national industrial structure, energy conservation and emission reduction, and is not conducive to achieving the goals of carbon peaking and carbon neutrality. It is not conducive to saving resources and protecting the ecological environment. It also creates false asset risks and business failure risks derived from virtual currency production and transactions. , investment speculation risks and other prominent risks, which are harmful to social and public interests; Wang continued to purchase "mining machines" for "mining" even though he knew the social harm of "mining" and the relevant departments clearly prohibited virtual currency-related transactions. "Mining", the agreement between Chen and Wang on the purchase of "mining machines" should be invalid because it harms social public interests, is not conducive to resource conservation, and protects the ecological environment.
Second, regarding the return of property. Article 157 of the Civil Code stipulates: “After a civil legal act is invalid, revoked or determined to be ineffective, the property obtained by the actor as a result of the act shall be returned; if it cannot be returned or is not necessary, the property shall be returned. Compensation at a discount. The party at fault shall compensate the other party for the resulting losses; if both parties are at fault, they shall each bear corresponding responsibilities. If the law provides otherwise, such provisions shall prevail." In this case, Chen and Wang "Mine The "machine" sales agreement is invalid and has no legal binding force from the beginning. The property acquired and possessed by both parties due to invalid civil legal actions has no legal basis and should be returned. Wang has returned the goods to Chen on the grounds that the goods are inconsistent with the contract, and Chen should return Wang's machine payment.
Thirdly, regarding Wang’s claim for interest on the funds for the payment of goods. The loss of interest on capital occupation claimed by Wang in this case is a type of loss. Since both Chen and Wang were at fault for the invalidity of the contract, they should bear the losses caused by the contract themselves. Therefore, Wang’s request for Chen to pay interest is Should not be supported. In summary, Chen should return the payment of 39,000 yuan to Wang.
[Judge Points]
"Mining" (mining "Bitcoin") has a limited role in promoting industrial development and technological progress, and not only breeds money laundering , illegal fund-raising and other illegal and criminal activities endanger financial security, and consume huge amounts of energy and carbon emissions, seriously polluting the environment. If a party engages in "mining machine" transactions for the purpose of "mining" activities, it violates public order and good customs, violates green principles, and harms social and public interests. The contract should be deemed invalid according to law. The property acquired or possessed by the other party due to invalid civil legal acts has no legal basis and must be returned.
Case 4: Copyright infringement case between a Beijing technology company and Mr. Huang: criminal determination of copying and distributing computer software with copyright owned by others for the purpose of profit without the permission of the copyright owner
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[Reasons for Judgment]
The court’s effective judgment held that the defendant The unit, a Beijing technology company, and its directly responsible person in charge, the defendant Huang, for the purpose of profit, copied and distributed other people's copyrighted computer software without the permission of the copyright owner. The circumstances were serious, and his behavior constituted the crime of copyright infringement and should be punished. punish. The People's Procuratorate of Haidian District, Beijing, accused the defendant, Beijing Technology Co., Ltd., and the defendant, Huang, of committing copyright infringement. The facts were clear, the evidence was conclusive and sufficient, and the charges were found guilty. In view of the fact that the defendant Huang truthfully confessed his basic crime after arriving at the case and during the trial, the defendant's unit and the defendant Huang had a good attitude of pleading guilty and repenting, and the defendant's unit actively returned the illegal income, the court imposed a heavy penalty on the defendant's unit and the defendant Huang was given a lighter punishment in accordance with the law. In the trial of this case, the amount of crime committed by the defendant unit was determined mainly based on the revenue earned by a third-party agency company from selling "Star Diamond Gifts" and other virtual currencies used to launch games for the defendant company.
[Judge Points]
1. For the purpose of profit, copy and distribute the copyrighted material owned by others without the permission of the copyright owner. Computer software, if the circumstances are serious, its behavior has constituted the crime of copyright infringement and should be punished; the unit may constitute the crime of copyright infringement.
2. For the infringement crime of piracy "mobile games" that adopts illegal profit channels and separates the accounts of website operating companies, the amount of the crime can be determined through the income and expenditure data of agents or third-party payment platforms. Sort out and verify. Income from virtual property such as game virtual gifts, equipment or currency sold by a third party on behalf of a third party can be used to determine the illegal business amount of pirated "mobile game" websites.
Case 5: A cultural and creative company in Shenzhen sued a technology company in Hangzhou for infringement of the right to disseminate work information network: Liability determination of NFT digital works trading network service provider< br>
https://rmfyalk.court.gov.cn/dist/view/content.html?id=XO5boHqsoW%252FR8lIrH84jw32kZRERQTSibFwBWPcqeHE%253D&lib=ck&qw=NFT
[Reason for Judgment]
The effective judgment of the court held that: There are three points of dispute in this case: first, whether the transaction of NFT digital works involved in the case is regulated by the right of information network dissemination; second, Hangzhou What kind of duty of care should a certain technology company have as the operator of an NFT digital works trading platform, and whether a Hangzhou technology company has fulfilled its duty of care in this case; the third is the civil liability of a Hangzhou technology company.
First of all, regarding whether the transaction of NFT digital works involved in the case is regulated by the right of information network dissemination. NFT digital collections are digital contents that are presented after uploading underlying data such as digital files to the NFT trading platform and casting NFT. When the underlying files are digital works, they are called NFT digital works. The transaction process of NFT digital works involves three stages: casting, listing and publishing, and sale and transfer. Among them, in the "casting" stage of NFT digital works, copying behavior is involved; in the listing and release stage of NFT digital works, information network dissemination behavior is involved; in the sale and transfer stage of NFT digital works, no copying behavior is involved, and no information network is involved. communication behavior. The objects of NFT digital works transactions are digital collections whose underlying files are digital works. As a form of digital collection, NFT digital works conform to the characteristics of online virtual property and have the attributes of property interests. Although the technology used in NFT digital works can more effectively avoid the risk of being copied repeatedly in subsequent circulation, due to the online virtual property attributes of NFT digital works, it is difficult to apply distribution rights to regulate the sale and transfer process of NFT digital works. Therefore, the current transaction of NFT digital works There is still no legal basis for applying the principle of exhaustion of rights. The principle of exhaustion of rights applies when the original work or an authorized legally produced copy is sold or donated for the first time with the permission of the copyright owner. In this case, the NFT digital work involved was purchased by a network user. It was cast without authorization without authorization from the copyright owner. Therefore, even if the principle of exhaustion of rights can be expanded and applied, this case lacks the prerequisite for the application of the principle.
Secondly, when determining what kind of care obligations a Hangzhou technology company should have as the operator of an NFT digital works trading platform, the following factors need to be considered: 1. The NFT digital works trading platform involved in the case provides network services. nature. Different from general network services, the network services provided by the NFT digital works trading platform are accompanied by the generation and transfer of corresponding property rights. The entire process of "casting" and listing of NFT digital works is controlled by the platform; 2. NFT digital works Possible infringement consequences of the transaction. Once the network users of the NFT digital works trading platform cast works that infringe the copyright of others into NFT digital works, based on the blockchain technology used in NFT digital works, except that the infringement information exists on the centralized server, the NFT recording the wrong information still exists On the blockchain, this will inevitably shake the foundation of NFT as a non-homogeneous certificate of rights, seriously affect the transaction security of NFT digital works, and destroy the trust mechanism and transaction order of the NFT digital works platform; 3. The NFT digital works trading platform involved in the case Profit model. A technology company in Hangzhou charges fuel fees for the casting and trading of NFT digital works, and also charges commissions during the trading process, which should be classified as "network service providers directly obtain economic benefits from works, performances, audio and video products provided by network users" " situation. Based on the above factors, a technology company in Hangzhou should have a higher duty of care than general network service providers for its network users' behavior that infringes on the right to disseminate information online. In addition to the obligations that general network service providers should bear, NFT digital work trading service platform operators should also review the legality of the source of NFT digital works and confirm that the minter of NFT digital works has appropriate rights. As a reasonable measure to prevent infringement, the review intervention time should be advanced to the time when users mint NFT digital works. In this case, a Hangzhou technology company failed to fulfill its corresponding duty of care. It was subjectively at fault for the alleged infringement and should bear civil liability for aiding the infringement.
About the civil liability of a Hangzhou technology company. Although the underlying files stored under the blockchain involved in the case disappeared and the corresponding NFT will no longer be available, after deleting the pictures involved and blocking the link address of the NFT on the blockchain, the NFT recording the infringing information still exists. On the blockchain, it has not had the effect of destroying infringing information. In view of the fact that a cultural and creative company in Shenzhen clearly filed the complaint, and a technology company in Hangzhou stated that the blockchain it used was a consortium chain, the NFT numbers involved in the case The work has only been traded once, so as one of the relief measures to stop infringement, it is reasonable to put the NFT involved in the black hole address. As for the black hole address of the alliance chain, even if the NFT may be recovered in theory, it will not affect the choice of infringement relief measures in this case. In terms of the amount of compensation, this case is a dispute over infringement of the right to disseminate information on the work information network. During the release stage of the NFT digital work involved, the infringement has already occurred. Even if the alleged infringing NFT digital work is not successfully traded, it cannot be regarded as a cultural and creative limited company in Shenzhen. The company suffered no losses due to the infringement.
[Judge Points]
1. During the release stage of NFT digital works, NFT digital works are provided in an open Internet environment, and the public can Obtaining the work at a selected time and place, which can be online browsing without condition of transfer, or downloading, browsing after online transfer, etc., is an act of information network dissemination.
2. Based on the particularity of NFT digital works and the nature of the network services provided by the trading platform, control capabilities, possible infringement consequences, and profit models, NFT digital works trading network service providers should Users who infringe upon the right to disseminate information online bear a relatively high duty of care. In addition to the obligations that general network service providers should bear, NFT digital works trading network service providers should establish an effective intellectual property review mechanism to review the source of rights of NFT digital works.
Administrative cases:
Luo v. Ji’an County Development and Reform Commission, Jiangxi Province, Ji’an County People’s Government Case of ordering correction, administrative reconsideration and review of normative documents: Judicial review of ordering individual virtual currency “mining” to rectify administrative actions
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[Reasons for Judgment]
The court’s effective judgment held that: In this case, Luo had no objection to the fact that he carried out virtual currency “mining” activities at home. However, virtual currency “mining” comes at the expense of power resources and carbon emissions, which is inconsistent with the goals of high-quality economic and social development, energy conservation and emission reduction, and carbon peaking and carbon neutrality. It is also contrary to the “green principle” of Article 9 of the Civil Code. . Ji'an County Development and Reform Commission, after repeatedly informing Luo to stop virtual currency "mining" activities but failed, issued the "Notice on Ordering Luo to Rectify Virtual Currency "Mining"", requiring Luo to dismantle relevant mining equipment and make rectifications. Nothing inappropriate. The Ji'an County Government accepted and reviewed Luo's application for administrative reconsideration, made an administrative reconsideration decision within the statutory time limit and served it in accordance with the law, which complied with legal regulations. Luo's request to conduct a review of normative documents together will not be supported.
[Judge Points]
Virtual currency “mining” comes at the expense of power resources and carbon emissions, and is incompatible with high-quality economic and social development, energy conservation and reduction. It is inconsistent with the goals of peaking emissions and carbon neutrality, and is also contrary to the "green principle" of Article 9 of the Civil Code of my country. After repeated notifications failed, the administrative agency ordered the counterparty to make rectifications, which was in line with legal provisions and national policies.
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