Shanghai High Court: It is not illegal for individuals to hold virtual currency, but it is illegal to issue tokens

According to the report from Sina Finance, the Shanghai Songjiang District People's Court recently concluded a service contract dispute case arising from the validity of a virtual currency issuance and financing service contract. The plaintiff, a certain agricultural development company (hereinafter referred to as Company X), had the idea of issuing virtual currency and raising funds through ICO in 2017. On the introduction and recommendation of the defendant, a certain investment management company (hereinafter referred to as Company S), Company X signed the "Blockchain Incubation Agreement" with Company S, entrusting Company S to create a 'white paper' and issue tokens based on mainstream blockchain smart contract technologies such as Bitcoin and Ethereum. However, after a year, the tokens had not been issued. When inquired by Company X, Company S stated that the issuance of tokens required the development of a corresponding APP first, and the APP development cost was high, which was not within their service scope, so Company X should develop the APP by itself, and Company S would only be responsible for the subsequent token issuance. Company X's expectations were dashed, and it sued the People's Court, requesting the termination of the contract and the refund of the 30,000 yuan service fee by Company S. The judge of the Songjiang District People's Court in charge of this case stated that virtual currency, as a virtual commodity, has property value, and the personal holding of virtual currency itself is not illegal, but business entities cannot arbitrarily participate in virtual currency investment transactions or even issue tokens on their own.