Author: Lawyer Liu Zhengyao

Introduction

Recently, the official social media account of the Intermediate People's Court of Tongling City, Anhui Province, published an article: "A Judgment Tells You: Why Losses from Virtual Currency Trading Can Only Be Borne by Yourself," which introduced a civil case of unjust enrichment arising from the buying and selling of virtual currency, adjudicated by its subordinate court (Zongyang Court).

Combined with some judgment documents related to virtual currency civil disputes released by courts across the country in 2025, we can already confirm: civil disputes involving virtual currency have moved away from being unaccepted by mainland courts and are now more commonly accepted by court filing offices. Although different courts across the country have varying standards for adjudication, there has been significant progress compared to the previous difficulties in accepting cases involving cryptocurrencies.

I. Case Introduction

In February 2025, the plaintiff Ding purchased 1,300 Tether (USDT) from the seller Wu (the defendant) on a trading platform, at a unit price of 7.44 yuan, totaling 9,672 yuan. After confirming the order, seller Wu sold his 1,300 Tether and received the payment of 9,672 yuan from Ding.

Subsequently, plaintiff Ding sued the court, claiming that the amount received by Wu (9,672 yuan) constituted unjust enrichment and demanded the return of the payment from defendant Wu. After hearing the case, the court concluded that "transactions related to virtual currency often operate outside legal regulation, and such trading behaviors can easily disrupt economic and financial order, giving rise to illegal activities that violate public order and good morals, such as gambling, illegal fundraising, fraud, pyramid schemes, and money laundering." Ultimately, the court determined that the virtual currency transaction between plaintiff Ding and defendant Wu was invalid due to its violation of public order and good morals, and even if Ding suffered losses, he should bear them himself, as the law does not provide protection.

The court ultimately dismissed Ding's request for the return of the money used to buy the currency from defendant Wu.

II. Lawyer's Analysis

This case is actually quite simple; the court's judgment result does not pose significant issues from a social effect perspective (though I feel it falls short legally). However, the reasoning process is overly simplistic, and if readers are not familiar with domestic regulations on virtual currency or judicial practices, they may still find it confusing. Therefore, the judgment of Zongyang Court gives a sense of "the answer is correct, but the process looks like a guess."

In fact, to clarify the judicial path for civil and commercial cases involving virtual currency, we need to address the following question:

First, Was the transaction completed? The core of the unjust enrichment dispute between Ding and Wu hinges on whether the virtual currency transaction was successfully completed. If it is determined that buyer Ding has received the currency, then even if the sales contract is deemed invalid, when returning property, one party must return money while the other returns the currency. In this case, the court deemed both parties' transaction invalid while also recognizing the legal consequences of the transaction (i.e., the buyer received virtual currency, and the seller received the corresponding RMB), which is somewhat contradictory. The most rigorous approach would still be for one party to return RMB and the other to return virtual currency.

Second, Understanding the accurate meaning of public order and good morals. A critical hurdle in adjudicating civil and commercial cases involving cryptocurrencies is to demonstrate whether the actions in question violate "public order and good morals." The "9.24 Notice" (Notice on Further Preventing and Dealing with Risks of Virtual Currency Trading Speculation) stipulates that for domestic entities investing in virtual currencies and their derivatives, "actions that violate public order and good morals are invalid, and any resulting losses shall be borne by the parties themselves."

Public order and good morals encompass public order and good customs. In disputes involving cryptocurrencies, we only consider the former, specifically public order, which includes "economic and financial order." Currently, in civil and commercial adjudication, it is generally recognized that investment and trading behaviors involving virtual currencies violate the public order (economic and financial order) of our society, leading judicial practice to deem behaviors such as lending, investing, buying, and exchanging involving virtual currencies as invalid under civil law.

Third, What are the existing adjudication bases? To date, there are no provisions in China's civil laws and regulations regarding virtual currencies, and the adjudication basis for cryptocurrency-related cases primarily relies on the aforementioned "9.24 Notice" (which was formulated with the participation of the Supreme People's Court, but its nature is that of a normative document).

III. The Qualification of Virtual Currency in Civil and Commercial Cases

In criminal judicial practice, China has long recognized the property attributes of virtual currencies, especially mainstream virtual currencies. In civil and commercial adjudication practice, courts' understanding of virtual currencies has been relatively lagging. Based on the author's personal experience, many courts in China still do not accept any civil and commercial disputes involving virtual currencies as of 2024. Since 2025, we have seen domestic courts beginning to accept the view of the property value of virtual currencies, and the number of judgment documents related to cryptocurrency cases has started to increase.

In November last year, the Shanghai High Court issued a document recognizing the property value of virtual currencies (see: "Shanghai High Court: Virtual Currency Has Property Value, but Token Financing Contracts Are Invalid"). In June this year, an article on the official account of the People's Court Daily also stated that "virtual currencies have corresponding property attributes, and there is a basic consensus in judicial practice," as detailed in the author's previous article "Judicial Disposal of Virtual Currency, People's Court Daily Published Article: Can Entrust Third-Party Institutions to Handle."

Additionally, in the April 2023 "Summary of the National Court Financial Trial Work Conference (Draft for Comments)," corresponding adjudication standards for civil and commercial disputes involving virtual currencies were proposed, stating: "Virtual currencies possess some attributes of network virtual property." Although this viewpoint is relatively mild and conservative, it can be understood given the time elapsed.

In summary, whether in criminal judicial practice or civil and commercial adjudication, the property attributes/property value of virtual currencies have become a consensus among legal practitioners. If a limitation must be added, it is restricted to mainstream virtual currencies (such as Bitcoin, Ethereum, Tether, etc.).

IV. Final Thoughts

Although the recognition of the property value of virtual currencies, especially mainstream virtual currencies, is increasing in mainland China, this does not mean that participating in any business activities related to virtual currencies is completely safe. As a practical lawyer in the web3 field, my experience over the past two years is that the regulatory environment for the entire crypto industry in mainland China is becoming increasingly strict. Whether you are a project initiator, participant, or an ordinary virtual currency "trader," you face legal risks that are significantly higher than those in other ordinary industries. If you are a relatively conservative person seeking a sense of security, it is advisable to be cautious when entering businesses related to virtual currencies.

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