Introduction

Recently, the official social media account of the Intermediate People's Court of Tongling City, Anhui Province, published an article titled: "A Court Ruling Tells You: Why You Have to Bear the Losses from Virtual Currency Transactions 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 that have been successively published by courts across the country in 2025, we can already confirm that 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 virtual currencies.

1. 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, the seller Wu sold his 1,300 Tether and received the payment of 9,672 yuan from Ding.

Subsequently, the plaintiff Ding filed a lawsuit in court, claiming that the amount received by Wu (9,672 yuan) constituted unjust enrichment and requested the defendant Wu to return it. After hearing the case, the court concluded that "transactions related to virtual currencies often operate outside legal regulation, and such trading behaviors can easily disrupt economic and financial order, leading to illegal activities that violate public order and good morals, such as gambling, illegal fundraising, fraud, pyramid schemes, and money laundering." Ultimately, the court ruled that the virtual currency transaction between the plaintiff Ding and the 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 Wu to return the money used to buy the currency.

2. Lawyer's Analysis

This case is actually quite simple; the court's ruling 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 readers who are not familiar with domestic regulations on virtual currencies and judicial practices may still find it confusing. Therefore, the ruling of the Zongyang Court gives a sense of "the answer is correct, but the process of arriving at it seems like a lucky guess."

In fact, to clarify the judicial path for civil and commercial cases involving virtual currency, the following question needs to be addressed:

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 the buyer Ding has received the currency, then even if the sales contract is deemed invalid, one party must return the money while the other returns the currency. In this case, the court deemed both parties' transaction invalid while also acknowledging 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 the RMB and the other to return the virtual currency.

Second, Understanding the accurate meaning of public order and good morals. In adjudicating civil and commercial cases involving virtual currencies, a key hurdle is to demonstrate whether the actions in question violate "public order and good morals." The "9.24 Notice" (Notice on Further Preventing and Handling 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 render the relevant civil legal acts 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 virtual currencies, we only consider the former, namely 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 judicial bases? To date, there are no provisions in China's civil laws and regulations regarding virtual currencies. The judicial basis for cases involving virtual currencies 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).

3. 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. However, in civil and commercial adjudication, the 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, with an increase in judgment documents related to cases involving virtual currencies.

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 Issuance Financing Contracts Are Invalid"), and in June this year, the People's Court Daily also stated in an article on its official account that "virtual currencies possess corresponding property attributes, and there is a basic consensus in judicial practice," as detailed in the author's previous article "Judicial Disposal of Virtual Currencies, People's Court Daily Published Article: Can Entrust Third-Party Institutions to Conduct."

Additionally, in the April 2023 "Summary of the National Court Financial Trial Work Conference (Draft for Comments)," a corresponding adjudication standard for civil and commercial disputes involving virtual currencies was 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 that has passed.

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 would be restricted to mainstream virtual currencies (such as Bitcoin, Ethereum, Tether, etc.).

4. Final Thoughts

Although the recognition of the property value of virtual currencies, especially mainstream virtual currencies, is growing stronger in mainland China, it 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 it is the initiation of crypto projects, participants, or ordinary virtual currency "traders," they all 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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