It’s 2025 now. How do Chinese courts view virtual currency trading cases?

By analyzing these cases, let’s take a look at the latest views of courts across the country on currency-related cases this year.

By Huang Wenjing and Gan Zihan, Mankiw Blockchain Legal Services

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 heat up. 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 hypothetical scams. At the same time, more and more people are eager to try their hand at cryptocurrency trading, attracted by stories of friends and relatives who have become rich through cryptocurrency speculation.

Since the September 24th Announcement in 2021, which designated cryptocurrency trading as illegal financial activity, domestic policy has remained unchanged. However, four years later, a significant gap has emerged between policy and judicial practice. While regulatory oversight remains strict, 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 toward cautious acceptance.

Today, we will analyze these cases to see the latest views of courts across the country on currency-related cases this year.

(Friendly reminder: China is not a country of case law. The courts will refer to past precedents when making decisions, but this is not absolute.)

Borrow U and don't return it? The court will order you to pay it back!

In June 2024 and January 2025, Wen borrowed 6,500 and 14,400 yuan, respectively, from Mao to invest in cryptocurrency trading. Mao agreed to the loans and transferred the funds in multiple installments to Wen's U-currency account. As the saying goes, borrowing is easy, repaying is difficult. After repeatedly urging Wen to repay without success, Mao took the IOUs and sued Wen in court. [Case No.: (2025) Zhe 0109 Min Chu 4938]

Xiaoshan District of Hangzhou City determined that the private loan relationship between the two parties was legal and valid, and ordered Wen to return all the principal and interest to Mao.

In Mankiw's opinion, this is one of the boldest judicial decisions in recent years, recognizing the validity of borrowing U. In the judgment, the legal currency price of 6,500 U was calculated based on the exchange rate of 1:7.3 at the time, and Wen was ordered to return the corresponding RMB. Compared with the cases in previous years where the courts dismissed the case or directly refused to file the case, the attitude of the court in this case towards cryptocurrencies has changed.

After successfully purchasing coins, I would like to request a refund. Is that possible? No!

In some past judicial cases, we have seen some courts determine that currency-related transactions are invalid because they violate public order and good morals, and completed currency-related transactions need to be returned.

In this context, some buyers who successfully purchased cryptocurrencies had ulterior motives and wanted to package the transfer of cryptocurrency purchases as loans, frauds, etc. to sue the court in an attempt to get away with it. However, things are different now. Many courts actually have some relevant knowledge about blockchain transfers. 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 just 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 there was no loan relationship between the two parties, stating that the 10,000 yuan was part of Zheng's purchase of 2,100 USDT virtual currencies (priced at 7 yuan each, with a total value of 14,700 yuan). The remaining 4,700 yuan was unpaid, and that the USDT had been delivered through the Yi Ecological Platform.

The court held that Zheng only provided WeChat transfer records, which 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. Referring 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 are illegal financial activities, and related civil acts are invalid, with the parties responsible for the losses.

Lawyer’s comment: In this case, after paying part of the transaction price, the plaintiff attempted to claim a refund in the name of “loan dispute”, which is a typical “repentance-style rights protection”.

After clarifying the factual background, the court did not support his claim, reflecting the improvement of its ability to identify the actual transaction intentions of virtual currency and ascertain facts.

• Case 2: (2024) Zhe 0122 Minchu No. 4242

Facts of the Case: 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 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 persons outside the case to purchase USDT.

The plaintiff claimed that the defendant had not actually purchased USDT and that the platform account changes were due to data manipulation, and 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: The court held that this case was a dispute over a commission contract. The plaintiff Wang entrusted the defendant Li to purchase USDT and participate in virtual currency investment, which was an illegal financial activity and violated public order and good morals. The contract was invalid.

The defendant's bank statements show that after receiving the plaintiff's funds, they transferred them to a third party to purchase USDT. The plaintiff failed to prove that the defendant modified the platform data, and therefore their 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 were used to purchase USDT. The existing evidence is insufficient to support the plaintiff's claims, and therefore the lawsuit is dismissed in its entirety.

Lawyer's Comment: In this case, Mr. Wang first claimed he was scammed into buying a U-coin, then later claimed the platform's data had been altered and the U-coin hadn't been credited to his account. This combination of tactics would probably leave Tyson somewhat bewildered. The defendant merely helped Mr. Wang buy a U-coin and made no profit from it, yet was forced to return the plaintiff a massive sum of 760,000 yuan, effectively leaving him with nothing.

Fortunately, the court made a fair judgment after clarifying the facts of the case.

These are two typical cases of buying and selling U-coins: one purchased directly from a U-coin dealer, and the other purchased 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 consensually conclude a successful transaction, while the contract involving cryptocurrency transactions is invalid, the court will verify the transaction background, evidence presented by both parties, and their understanding of cryptocurrency to ascertain the facts and restore the essence of the transaction. They will then flexibly apply relevant legal provisions to properly resolve disputes between the parties.

Therefore, after a successful transaction, if the buyer wants to unilaterally recover the legal currency through various causes of action (unjust enrichment, loan contract disputes, invalidity of civil legal acts, etc.), or just want a refund, those who bought for 0 yuan should save their energy.

Didn’t they say you bear the risk yourself ? Why did the court support a refund?

• Case 1: Principal protection commitment constitutes liability

Facts: Starting in September 2023, the defendant, Wang, induced the plaintiff to invest in Tether (USDT) on the pretext of high returns. On September 19, October 21, and November 15, he issued letters of guarantee, promising to compensate the plaintiff for principal and profits 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 for the plaintiff. 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 morality, and was therefore a void contract. The plaintiff should bear the adverse consequences of a failed investment. However, the defendant, through a letter of guarantee promising compensation for principal and profits, induced the plaintiff to invest, thus constituting fault and corresponding liability. The court determined that the defendant was liable for 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: The contract is invalid. If both parties are at fault, they shall bear corresponding responsibilities. The plaintiff entrusted the defendant to invest in cryptocurrency without fulfilling the prudent obligation and has certain faults, while the defendant induced investment to bear the main responsibility. In the end, the court ruled that the defendant should bear 60% of the principal responsibility based on the principle of fairness.

• Case 2: Received money but did not give coins, the court supported the 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 maintained that the 10,000 yuan was used by the plaintiff 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 the plaintiff and the defendant. The defendant acknowledged receiving 10,000 yuan and claimed it was a virtual currency transaction. However, this transaction violated my country's financial policies, was illegal, and was not protected by law. However, the defendant could not prove the virtual currency had been delivered, and the platform was no longer accessible. Ultimately, the court, pursuant to the relevant provisions of the Civil Code, ordered the defendant to return the 10,000 yuan.

Lawyer's comment: This is a counterexample to the so-called 0 yuan purchase in the above case. It is not acceptable for the seller to only accept money but not give coins.

• Case 3: Post-commitment is effective

Case Facts: Plaintiff Yi and defendant Shen were longtime friends. Yi engaged in foreign trade with Ukraine and faced difficulties in remittances due to the Russo-Ukrainian War. In June 2023, defendant Shen recommended a "reliable" remittance agency to Yi, introducing Zhong, a person outside the case, who he claimed had a partner in Dubai who could handle trade remittances. On June 27, at Zhong's request, Yi, through his employee "Dazhi" in Ukraine, transferred $43,000 USD to Zhong in USDT virtual currency, intending to exchange it for RMB back home. However, he did not receive 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 60,000 RMB upfront and the remaining balance within three months. However, the payment has not been made to date. [(2024) Zhe 0502 Minchu 3012]

The court held that plaintiff Yi and defendant Shen formed an intermediary contract, whereby Shen introduced Zhong to Yi to provide remittance agency services. Yi converted US dollars 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, Shen's promise to pay 160,000 yuan and agreed on a payment date during a July 3rd communication formed a new, valid contract. This promise was independent of the invalid intermediary contract, did not violate public order and good morals, and was therefore protected by law. Shen's failure to perform as agreed constituted a breach of contract and he was ordered to pay 160,000 yuan plus corresponding interest.

Lawyer's Comment: Privately exchanging foreign currency is illegal and not protected by law. However, in this case, the court supported the refund for one important reason: the defendant promised to repay the money.

Lawyer's Summary

Judging from several cases in 2025, although regulatory policies still maintain the characterization of "illegal financial policies", some courts have demonstrated more detailed judicial judgments in specific cases:

• If the cryptocurrency has been delivered and the buyer claims its return due to factors such as price fluctuations, the court tends to reject the claim.
• If one party fails to fulfill its delivery obligations, the court will support a refund.
• If one party engages in unethical investment or promises to guarantee principal, the court may also impose liability at its discretion based on the fairness principle of the Civil Code.

From these cases, we can feel that judicial authorities are trying to find a more precise balance between compliance bottom line and real transactions.

For ordinary investors, when participating in transactions, they should still strengthen their risk awareness and clearly define the boundaries of responsibility. If necessary, they can use contracts or written communication records to record the transaction process between the two parties and clarify the essence of the transaction in case of emergency.

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