In recent years, with the opening up of cryptocurrency policies in regions like the United States and Hong Kong, and the gradual exploration of blockchain technology in China, the global cryptocurrency boom has continued to gather momentum. Many financial institutions, traditional capital markets, and even some government departments have recognized the asset and investment properties of cryptocurrencies, no longer simply viewing them as speculative scams. Simultaneously, more and more people are eager to try their hand, many drawn to cryptocurrency trading by stories of friends and relatives getting rich quick through cryptocurrency trading. Since the September 24th 2021 announcement designating cryptocurrency trading as illegal financial activity, domestic policy has remained unchanged. However, four years later, the gap between policy and judicial practice is becoming noticeable. On the one hand, regulatory standards remain strict; on the other, courts in first-tier cities have begun experimenting with a tiered approach to handling cryptocurrency-related disputes in civil adjudications, partially upholding relevant civil claims and demonstrating a trend of cautious acceptance. Today, we will analyze these cases to examine the latest perspectives of courts across the country on cryptocurrency-related cases this year. (Reminder: China is not a country of case law. Courts do refer to past precedents when making decisions, but this is not absolute.) Borrow U and don't pay it back? The court will order you to pay it back! In June 2024 and January 2025, Wen borrowed 6,500 U and 14,400 yuan, respectively, from Mao to use for cryptocurrency trading. Mao agreed to the loans and transferred the funds to Wen's U-coin account in multiple installments. As the saying goes, it's easy to borrow U but hard to repay U. After repeatedly demanding repayment from Wen to no avail, Mao took the IOUs and took Wen to court. [Case No.: (2025) Zhe 0109 Minchu 4938] The Xiaoshan District Court of Hangzhou City has determined that the private loan relationship between the two parties is legal and valid, and ordered Wen to repay Mao in full principal and interest. In Mankiw's view, this is a relatively bold judicial ruling in recent years, recognizing the validity of the loan. The ruling calculated the fiat currency value of 6,500 U using the then-current exchange rate of 1:7.3, and ordered Wen to return the corresponding amount in RMB. Compared to previous cases in which cases were dismissed or even rejected outright, this case demonstrates a shift in the court's attitude toward cryptocurrency. After successfully purchasing cryptocurrency, can I simply request a refund? No! In some past judicial cases, we've seen some courts determine that cryptocurrency-related transactions are invalid because they violate public order and good morals, and that completed cryptocurrency-related transactions must be refunded. In this context, some buyers who successfully purchased cryptocurrency have had ulterior motives, trying to disguise the transfers of cryptocurrency purchases as loans, fraud, and other forms of litigation in court in an attempt to get away with it. However, things are different now. Many courts already have some relevant knowledge of blockchain transfers, and even the Shenzhen Court mini-program has a blockchain evidence verification service. Below are two recent cases to see how the courts handled buyers who simply wanted a refund. Case 1: (2025) Yu 9001 Minchu No. 3862 Facts: On February 2, 2023, Zheng transferred 10,000 yuan to Zhao via WeChat. He filed a lawsuit, claiming the transfer was a loan and demanding the return of the principal. Zhao argued that no loan relationship existed, stating that the 10,000 yuan was part payment for Zheng's purchase of 2,100 USDT virtual currencies (priced at 7 yuan each, totaling 14,700 yuan). The remaining 4,700 yuan remained unpaid, and that the USDT had been delivered via the Yi Ecological Platform. The court held that Zheng's mere WeChat transfer record failed to prove a loan relationship. Zhao provided WeChat chat records and other evidence to prove that the 10,000 yuan was used to purchase USDT, and that 2,100 USDT had been delivered. Considering the context of the case, the court ruled that a loan relationship did not exist. According to the "Notice of the People's Bank of China and Ten Other Departments on Further Preventing and Addressing the Risks of Virtual Currency Transaction Speculation" (Yinfa [2021] No. 237) and Article 157 of the Civil Code of the People's Republic of China, virtual currency transactions constitute illegal financial activities, making related civil acts invalid and the parties responsible for their own losses. Lawyer's Comment: In this case, the plaintiff, after paying part of the transaction price, attempted to claim a refund under the guise of a "loan dispute," a typical case of "repudiation-style rights protection." After clarifying the facts, the court did not support his claim, demonstrating its improved ability to identify the actual intent of virtual currency transactions and ascertain facts. Case 2: (2024) Zhejiang 0122 Minchu No. 4242 Facts: Plaintiff Wang claimed that defendant Li induced him to invest in the virtual currency USDT. In 2021, he transferred a total of 760,000 yuan to the defendant through various means, entrusting him to purchase USDT. After receiving the funds, defendant Li transferred part of the funds to Zhou, Hua, and other non-parties to purchase USDT. The plaintiff claimed that the defendant did not actually purchase USDT and that the platform account changes were due to data manipulation. He sought the return of the funds plus interest. The court found that the plaintiff's entrustment of the defendant to purchase virtual currency constituted a commission contract, but because virtual currency trading constitutes illegal financial activity, the contract was deemed invalid. The Court held that this case was a dispute over a commission contract. Plaintiff Wang commissioned defendant Li to purchase USDT. This virtual currency investment constituted illegal financial activity and violated public order and good morals, and the contract was therefore invalid. The defendant's bank statements showed that he transferred the funds to a third party to purchase USDT after receiving payment from the plaintiff. The plaintiff failed to prove that the defendant altered the platform data, and therefore his claim for return was not supported. According to the relevant provisions of the Civil Code, when a contract becomes invalid, the perpetrator must return the property obtained under the invalid contract. However, the defendant did not profit from the contract, and the funds had already been used to purchase USDT. The existing evidence was insufficient to support the plaintiff's claims, and therefore the lawsuit was dismissed in its entirety. Lawyer's Comment: In this case, Wang first claimed he was deceived into purchasing USDT, then claimed that the platform data had been altered and the USDT had not been received. This combination of tactics would probably leave Tyson a bit confused. The defendant merely helped Mr. Wang buy a U and made no profit from it, yet was required to return the plaintiff a substantial sum of 760,000 yuan, facing the prospect of losing all his money. Fortunately, the court, after clarifying the facts of the case, rendered a fair judgment. These are two typical U-buying cases: one directly from a U-seller, the other indirectly through a proxy. Setting aside the cryptographic nature of these transactions, they are essentially simple sales and commission contracts. As we can see, when both parties voluntarily and successfully transact, while the contract involving cryptocurrency transactions is invalid, the court will verify the transaction background, the evidence provided by both parties, and their understanding of cryptocurrency to ascertain the facts and restore the essence of the transaction, flexibly applying relevant legal provisions to properly resolve disputes between the parties. Therefore, after a successful transaction, if the buyer seeks to unilaterally recover fiat currency through various grounds of action (unjust enrichment, loan contract disputes, invalidity of civil acts, etc.), or simply seeks a refund, those who purchased for 0 yuan should save themselves the trouble. Didn't they say you bear all the risk yourself? Why did the court uphold a refund? Case 1: A promise to guarantee principal constitutes liability Facts: Starting in September 2023, the defendant, Mr. Wang, induced the plaintiff to invest in Tether (USDT) on a certain exchange, promising high returns. On September 19, October 21, and November 15, he issued letters of guarantee promising to compensate the plaintiff for the principal and returns if the investment failed. The plaintiff transferred 1.5899 million yuan to the defendant and a designated account, and the defendant purchased 1.6 million yuan worth of USDT on his behalf. In early 2024, the exchange ceased trading, and the plaintiff's attempts to recover the principal were unsuccessful. The defendant only returned 5.382874 million yuan, leaving the remaining 1.0516126 million yuan unpaid. [(2025) Zhe 0127 Minchu No. 331]
The court held that the plaintiff, Mr. Wang, entrusted the defendant, Mr. Wang, to invest in Tether (USDT). Because virtual currencies are not legal tender, the transaction violated financial security and public order and good morals, resulting in a void contract. The plaintiff should bear the adverse consequences of a failed investment. However, the defendant, by promising compensation for principal and profits through a letter of guarantee, induced the plaintiff to invest, thus constituting fault and bearing corresponding liability. The court, at its discretion, ordered the defendant to bear 60% of the remaining investment of 1,051,612,600 yuan, or 6,309,675,600 yuan, and rejected the plaintiff's other claims.
Lawyer's Comment: If a contract is void, both parties are at fault and each bears corresponding liability. The plaintiff's failure to exercise due diligence in entrusting the defendant to invest in cryptocurrency constituted a degree of fault, while the defendant's primary liability stemmed from inducing the investment. Ultimately, the court, in accordance with the principle of fairness, ordered the defendant to bear liability for 60% of the principal. Case 2: Received Money, Not Given Coins; Court Upholds Refund Facts: This case involves a contractual dispute between plaintiff Xu and defendant He. The core facts revolve around the use of a 10,000 yuan transfer from the plaintiff to the defendant in July 2023 and the subsequent dispute. The plaintiff claimed the payment was a service fee for recommending high-yield stock investments to the defendant. The defendant insisted that the 10,000 yuan was used to purchase virtual currency (CG Coin) through the CG platform for gambling. [(2025) Yue 0104 Minchu No. 16716] The court held that the plaintiff's claim for stock investment service fees lacked sufficient evidence, and the mere transfer records were insufficient to prove a stock trading service agreement between him and the defendant. The defendant acknowledged receiving the 10,000 yuan and claimed it was a virtual currency transaction. However, this transaction violated China's financial policies, was illegal, and was not protected by law. However, the defendant was unable to prove that the virtual currency had been delivered and that the platform was no longer accessible. Ultimately, the court, pursuant to the relevant provisions of the Civil Code, ordered the defendant to refund 10,000 yuan. Lawyer's Comment: This is a counterexample to the so-called "0 yuan purchase" mentioned in the above case; the so-called seller only accepting cash without giving virtual currency is also unacceptable. Case 3: Validity of a Post-Promise Facts: Plaintiff Yi and defendant Shen were longtime friends. Yi engaged in foreign trade with Ukraine, but the Russo-Ukrainian War caused difficulties in remittances. In June 2023, defendant Shen recommended a "reliable" remittance agency to Yi, introducing Zhong, an outsider, who claimed to have a partner in Dubai to handle trade remittances. On June 27, at Zhong's request, Yi, through his Ukraine-based employee "Dazhi," transferred $43,000 USD to Zhong via USDT virtual currency, intending to exchange it for RMB back home. However, he never received the funds, and Zhong subsequently lost contact. On June 29, Yi traveled to Huzhou to meet with Shen in person. In the early morning of July 3, Shen admitted to having "guaranteed" the safety of the funds and agreed to assume liability for 160,000 RMB, paying an initial 60,000 RMB and the remaining balance within three months. However, he has yet to pay. [(2024) Zhe 0502 Minchu 3012] The court held that the plaintiff Yi and the defendant Shen had entered into an intermediary contractual relationship, whereby Shen introduced Zhong to Yi to provide remittance agency services. Yi converted USD into USDT virtual currency, which Zhong then exchanged for RMB. Because virtual currency transactions violated China's foreign exchange management system and public order and good morals, the intermediary contract was invalid. However, in a July 3rd communication, Shen promised to pay 160,000 yuan and agreed on a payment schedule, forming a new, valid contract. This promise is independent of the invalid intermediary contract, does not violate public order and good morals, and should be protected by law. Shen failed to perform as agreed, constituting a breach of contract and must pay 160,000 yuan plus corresponding interest. Lawyer's Comment: Private foreign exchange trading is illegal and not protected by law. However, in this case, the court supported a refund for one important reason: the defendant's promise to repay. Lawyer's Summary: Several precedents from 2025 show that while regulatory policies still maintain the characterization of "illegal financial policies," some courts have demonstrated more nuanced judicial judgment in specific cases: If cryptocurrency has already been delivered and the buyer claims a refund due to factors such as price fluctuations, the court tends to dismiss such claims.
If one party fails to fulfill its delivery obligations, the court will support a refund.
If one party engages in unethical investment, promises to guarantee principal, and other such process behaviors, the court may also, at its discretion, impose liability based on the fairness principle of the Civil Code.
From these cases, we can feel that judicial authorities are trying to find a more balanced judgment between the bottom line of compliance and the reality of transactions.
For ordinary investors, when participating in transactions, they should still strengthen their risk awareness and clarify the boundaries of responsibility. If necessary, the transaction process between the two parties can be recorded through contracts and written communications to clarify the essence of the transaction in case of emergency.
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