Original Authors: Huang Wenying, Gan Zihan

In recent years, with the open policies towards cryptocurrencies in regions such as the United States and Hong Kong, as well as the gradual exploration of blockchain technology domestically, the global cryptocurrency wave has continued to heat up. Many financial institutions, traditional capital, and even some government departments have recognized the asset and investment attributes of cryptocurrencies, no longer viewing them solely as air scams. Meanwhile, more and more people are eager to try their hand at it, with many drawn by stories from friends and relatives about "getting rich from trading coins," and they are attempting to participate in cryptocurrency trading.

Since the "924 Announcement" in 2021 classified cryptocurrency trading as illegal financial activity, there has been no relaxation in domestic policy. However, four years later, the temperature difference between policy and judiciary is becoming significant. On one hand, regulatory standards remain strict; on the other hand, courts in first-tier cities have begun to attempt layered handling of cryptocurrency-related disputes in civil rulings, with some supporting related civil claims, reflecting a trend of "prudent acceptance."

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

(Note: China is not a common law country; courts will refer to past cases when making rulings, but this is not absolute.)

Borrowing U and Not Paying Back? The Court Orders You to Repay!

In June 2024 and January 2025, Wen borrowed 6500 U and 14400 yuan from Mao for trading coins. Mao agreed to the loan and transferred the funds to Wen's U coin account in multiple transactions. The saying goes, borrowing U is easy, but repaying U is hard. After multiple unsuccessful attempts to urge Wen to repay, Mao took the loan note and sued Wen in court. [Case No.: (2025) Zhe 0109 Minchu 4938]

The court in Xiaoshan District, Hangzhou, recognized the legality and validity of the private lending relationship between the two parties and ordered Wen to repay all principal and interest to Mao.

According to lawyer Mankun, this is considered a relatively bold judicial ruling in recent years, acknowledging the validity of borrowing U. The ruling calculated the 6500 U at the exchange rate of 1:7.3 to determine the legal currency price, ordering Wen to return the corresponding amount in RMB. Compared to previous years where cases were dismissed or not accepted, the court's attitude towards cryptocurrencies in this case has improved.

After Successfully Buying Coins, Can I Just Get a Refund? No!

In some past judicial cases, we have seen courts deem cryptocurrency-related transactions invalid due to violations of public order and good morals, requiring the return of completed transactions.

In this context, some buyers who successfully purchased cryptocurrencies have had ulterior motives, attempting to disguise their cryptocurrency purchases as loans or fraud in order to sue in court and evade responsibility. However, times have changed; many courts now possess some knowledge of blockchain transactions. Even the Shenzhen court's mini-program has a service for verifying blockchain evidence.

Here are two recent cases to see how courts handle buyers who only want refunds.

• Case One: (2025) Yu 9001 Minchu 3862

Case Facts: On February 2, 2023, Zheng transferred 10,000 yuan to Zhao via WeChat, suing the court and claiming it was a loan, demanding the return of the principal. Zhao argued that there was no lending relationship, stating that the 10,000 yuan was part of Zheng's payment for purchasing 2100 USDT virtual currencies (at a unit price of 7 yuan, totaling 14,700 yuan), with the remaining 4,700 yuan unpaid, and that USDT had been delivered through the "Yishengtai Platform."

The court found that Zheng only provided WeChat transfer records and failed to prove the existence of a lending relationship. Zhao provided WeChat chat records and other evidence, proving that the 10,000 yuan was for purchasing USDT and that 2100 USDT had been delivered. Considering the case background, the court concluded that no lending relationship existed. Referring to the "Notice from the People's Bank of China and ten other departments on further preventing and handling the risks of virtual currency trading speculation" (Yin Fa [2021] No. 237) and Article 157 of the Civil Code of the People's Republic of China, virtual currency trading is classified as illegal financial activity, rendering the related civil actions invalid, with losses borne by the parties involved.

Lawyer's Comment: In this case, the plaintiff attempted to claim a refund under the guise of a "loan dispute" after paying part of the transaction price, which is a typical case of "backtracking rights protection."

After clarifying the factual background, the court did not support the claim, reflecting an improvement in recognizing the actual trading intent of virtual currencies and the ability to ascertain facts.

• Case Two: (2024) Zhe 0122 Minchu 4242

Case Facts: The plaintiff Wang claimed to have been induced by the defendant Li to invest in the virtual currency USDT, transferring a total of 760,000 yuan to the defendant through various means in 2021, entrusting him to purchase USDT. After receiving the funds, the defendant Li transferred part of the money to third parties Zhou and Hua for purchasing USDT.

The plaintiff claimed that the defendant did not actually purchase USDT, and the changes in the platform account were due to data modification, demanding the return of the funds and interest. The court found that the plaintiff's entrustment of the defendant to purchase virtual currency constituted a commission contract, but since virtual currency trading is classified as illegal financial activity, the contract was deemed invalid.

The court stated: This case is a commission contract dispute. The plaintiff Wang entrusted the defendant Li to purchase USDT, and participating in virtual currency investment is illegal financial activity, violating public order and good morals, thus the contract is invalid.

The bank statements provided by the defendant showed that after receiving the plaintiff's funds, he transferred money to a third party to purchase USDT. The plaintiff failed to prove that the defendant modified the platform data, and thus the court did not support the claim for a refund. According to the relevant provisions of the Civil Code, after a contract is deemed invalid, the party should return the property obtained from the invalid contract, but the defendant did not profit from it, and the funds had already been used to purchase USDT. The existing evidence was insufficient to support the plaintiff's claim, so all litigation requests were dismissed.

Lawyer's Comment: In this case, Wang first claimed to have been scammed into buying U, then said the platform data was modified and U was not credited. This combination of claims would likely confuse even Tyson. The defendant merely helped Wang buy a U and did not profit from it, yet he was expected to return the plaintiff's 760,000 yuan, facing a situation where all money could be lost.

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

These are two typical cases of buying and selling U, one directly purchasing from a U merchant and the other entrusting someone else to purchase indirectly. Setting aside the cryptocurrency attributes, it is essentially a simple sales contract and a commission contract. We can see that in cases of voluntary and successful transactions, although the contracts involving cryptocurrency trading are invalid, the court will also clarify the facts and restore the essence of the transaction by checking the transaction background, the evidence from both parties, and their understanding of cryptocurrencies, flexibly applying relevant legal provisions to properly handle disputes between the parties.

Therefore, buyers who want to unilaterally reclaim legal currency through various claims (unjust enrichment, loan contract disputes, invalid civil legal actions, etc.) after a successful transaction, and those hoping for a refund of 0 yuan, should save their efforts.

Isn't it said that risks are borne by oneself? Why did the court support the refund?

• Case One: Capital Preservation Commitment Constitutes Liability

Case Facts: Starting in September 2023, the defendant Wang induced the plaintiff to invest in Tether (USDT) by claiming high returns from investments in a certain exchange. On September 19, October 21, and November 15, he issued "Guarantee Letters," promising to compensate the principal and profits if the investment failed. The plaintiff transferred 1,589,900 yuan to the defendant and was provided with USDT worth 1,600,000 yuan. In early 2024, the exchange stopped trading, and the plaintiff was unable to recover the principal, with the defendant only returning 538,287.4 yuan, leaving 1,051,612.6 yuan unpaid. [Case No.: (2025) Zhe 0127 Minchu 331]

The court found: The plaintiff Wang entrusted the defendant Wang to invest in Tether (USDT). Since virtual currencies do not have legal compensation, the transaction violates financial security and public order, constituting an invalid contract. The plaintiff should bear the adverse consequences of the investment failure, but the defendant, through the "Guarantee Letter," promised to compensate the principal and profits, inducing the plaintiff to invest, thus bearing corresponding responsibility. The court determined that the defendant should bear 60% of the remaining investment amount of 1,051,612.6 yuan, amounting to 630,967.56 yuan, and dismissed the plaintiff's other claims.

Lawyer's Comment: The contract is invalid, and both parties have faults, each bearing corresponding responsibilities. The plaintiff's failure to exercise due diligence in entrusting the defendant to invest in cryptocurrencies constitutes a certain fault, while the defendant bears primary responsibility for inducing the investment. Ultimately, the court ruled that the defendant should bear 60% of the principal based on the principle of fairness.

• Case Two: Taking Money Without Providing Coins, Court Supports Refund

Case Facts: This case involves a contract dispute between the plaintiff Xu and the defendant He, with the core fact revolving around the purpose of the 10,000 yuan transferred by the plaintiff to the defendant in July 2023 and subsequent disputes. The plaintiff claimed that the amount was a service fee for recommending high-yield stock investments. The defendant insisted that the 10,000 yuan was for the plaintiff to purchase virtual currency (CG coin) through the CG platform for gambling. [Case No.: (2025) Yue 0104 Minchu 16716]

The court found: The plaintiff's claim for stock investment service fees lacked sufficient evidence, and the transfer records alone were insufficient to prove the existence of a stock service agreement with the defendant. The defendant admitted to receiving the 10,000 yuan and claimed it was for virtual currency trading, but this transaction violated China's financial policies and was illegal, thus not protected by law. However, the defendant could not prove that virtual currency had been delivered, and the platform was no longer accessible. Ultimately, the court ruled that the defendant should refund the 10,000 yuan based on the relevant provisions of the Civil Code.

Lawyer's Comment: This is the counterexample to the so-called 0 yuan purchase mentioned above; sellers cannot just take money without providing coins.

• Case Three: Post-Commitment Valid

Case Facts: The plaintiff Yi and the defendant Shen have been friends for many years. Yi is engaged in foreign trade with Ukraine, and due to difficulties in remittance caused by the Russia-Ukraine war, in June 2023, the defendant Shen recommended a "reliable" remittance agency, introducing a third party, Zhong, claiming he had partners in Dubai to handle trade remittances. On June 27, Yi transferred 43,000 USD to Zhong in USDT virtual currency through his employee "Dazhi" in Ukraine, intending to exchange it for RMB to return home, but did not receive the funds, and Zhong subsequently went offline. On June 29, Yi went to Huzhou to communicate with Shen in person, and in the early hours of July 3, Shen admitted to having "guaranteed" the safety of the funds and agreed to bear 160,000 yuan in responsibility, paying 60,000 yuan first and the remaining amount within three months, but has not paid to date. [Case No.: (2024) Zhe 0502 Minchu 3012]

The court found: The plaintiff Yi and the defendant Shen formed a commission contract relationship, with Shen introducing Zhong to provide remittance agency services to Yi, who transferred USD to Zhong in USDT virtual currency for exchange into RMB. Since virtual currency trading violates China's foreign exchange management regulations and public order, the commission contract is invalid. However, Shen's promise to pay 160,000 yuan during the communication on July 3 and the agreed payment time formed a new valid contract, which is independent of the invalid commission contract and does not violate public order, thus should be protected by law. Shen's failure to perform as agreed constitutes a breach of contract, and he must pay 160,000 yuan plus corresponding interest.

Lawyer's Comment: Conducting foreign exchange exchanges privately is illegal and not protected by law. However, in this case, the court supported the refund for an important reason: the defendant's promise to repay.

Lawyer's Summary

From several rulings in 2025, although regulatory policies still maintain the classification of "illegal financial activities," some courts have shown more detailed judicial judgments in specific cases:

• If the cryptocurrency has been delivered, and the buyer claims a refund due to price fluctuations, the court tends to dismiss the claim.
• If one party has not fulfilled the delivery obligation, the court supports a refund.
• If one party has engaged in investment promises or capital preservation commitments, the court may also determine liability based on the principle of fairness in the Civil Code.

From these rulings, we can sense that judicial authorities are attempting to seek a more balanced judgment between compliance boundaries and real transactions.

For ordinary investors, when participating in transactions, they should still strengthen their risk awareness and clarify responsibility boundaries. If necessary, they can use contracts and written communication records to document the transaction process and clarify the essence of the transaction for future reference.

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