In another landmark ruling, a Chinese court has declared crypto lending activities to be outside the country’s legal protection, further complicating the crypto landscape in China.
In a second significant ruling, a Chinese court has declared crypto lending to be an activity outside the country’s legal protection. The case involved an individual known as Mr. Gang, who borrowed 80,000 Tether for stablecoin trading. The loan was meant to be repaid within six months, but Mr. Gang defaulted, prompting Mr. Ming to take legal action.
The Nanchang People’s Court’s decision held that Mr. Ming needed to prove that Tether was a legally issued fiat currency to pursue a case for judicial relief. As he couldn’t establish this, the court ruled that the lawsuit was not within the scope of civil litigation. An appeal by Mr. Ming met the same fate, with the judge emphasizing the legal risks associated with virtual currency investment and trading activities. They stated that investing in virtual currencies and related derivatives that violate public order and good customs would result in invalid civil legal actions.
This ruling adds to the complications faced by the crypto industry in China, where cryptocurrencies have been banned since late 2021 due to environmental and surveillance concerns.
