China Court Network News (Wang Xiyu and Zhu Pengfei) Recently, the Gaotang County People’s Court of Shandong Province heard a first-instance case involving a service contract dispute arising from Chia coin “mining”. It found the contract invalid according to law and ruled to reject the plaintiff’s request for the return of service fees. It is reported that this case is the first case in the city where an online “mining” contract was deemed invalid.
After trial, the court found that the plaintiff Du signed a "CHIA Technical Service Contract" with the defendant Song and the defendant company, stipulating that the defendant would provide P disk services. After the contract was signed, the plaintiff paid the service fee and the defendant provided P disk services to the plaintiff. Later, the plaintiff sued the court for a refund of all service fees because the defendant failed to complete the service within the agreed time limit.
The court held that the plaintiff signed the "CHIA Technical Service Contract" with the defendant and entrusted the defendant to provide P disk services for the purpose of participating in "mining" of the Chia coin network, which was a virtual currency-related business activity. This activity involves violations of financial security, market order, and national macro-policy, affects social and public interests, violates public order and good customs, and should be deemed invalid. Therefore, the court did not support the plaintiff’s request for the defendant to return service fees.
Judge's statement
According to Wang Ruiqi, the judge presiding over the case, illegal debts are not protected by law. The "Notice on Further Preventing and Dealing with Speculation Risks in Virtual Currency Transactions" (Yinfa [2021] No. 237) clearly states: "Virtual currency does not have the same legal status as legal currency. Virtual currency-related business activities are illegal financial activities. There are legal risks in participating in virtual currency investment and trading activities. If any legal person, unincorporated organization or natural person invests in virtual currency and related derivatives that violates public order and good customs, the relevant civil legal actions will be invalid, and the resulting losses will be borne by themselves." Here, the judge reminded everyone that production and business activities should be carried out within the scope permitted by laws and policies, and the public should consciously enhance their awareness of risk prevention and not participate in activities that affect social public interests and violate public order and good customs.
