Historic Decision: Chinese Court Denies Crypto Lending Once More.

Historic Decision: Chinese Court Denies Crypto Lending Once More.China's legal system does not yet apply to crypto lending activities, according to a court there on Tuesday in the country's second decision of that kind.Lending out virtual money...

Historic Decision: Chinese Court Denies Crypto Lending Once More.

Historic Decision: Chinese Court Denies Crypto Lending Once More.


China's legal system does not yet apply to crypto lending activities, according to a court there on Tuesday in the country's second decision of that kind.


Lending out virtual money and demanding a return, according to a press release from the Nanchang People's Court, "is not within the scope of civil litigation.". ".


A Google translation of the press release states that the judge in the related lawsuit stated, "Virtual currency is different from digital RMB.". Redeemable for coins and banknotes, Digital RMB is a type of central bank digital currency (CBDC) offered by the Central Bank of China.


Virtual currencies—like Bitcoin, Ethereum, Tether, and others—only exist digitally; they are not recognized as legal tender or as having any kind of legal value. and cannot be exchanged for money in the market," the judge went on.


The case concerned a person known as "Mr. Ming, who gave "Mr." 80,000 USDT. Gang" for trading stablecoins with the goal of generating yield. However, the former filed a lawsuit against the latter after the latter failed to repay his loan.


The court rejected USDT as being legally compensable, though, since it was not found to have been a currency issued in compliance with the law. The decision was challenged by Mr. Dot Ming, but this was also turned down.


Following the central bank's assertions that cryptocurrency undermines "national financial order" and "social public interests," the judge emphasized in their decision the illegality of cryptocurrency transactions as a whole. "They went on:.


The relevant civil legal actions will be deemed invalid, and any losses incurred by any legal person, unincorporated organization, or natural person who invests in virtual currencies and related derivatives in violation of public order and good customs will be their own responsibility. ".


The Cryptocurrency Ban in China.


Following a May 2021 ban on Bitcoin mining, China's central bank, citing worries about economic instability and criminal activity, implemented a comprehensive ban on all cryptocurrency transactions in September of that same year.


China is still a major destination for cryptocurrency volume. According to Chainalysis, between July 2022 and June 2023, the area received transactions totaling $86.4 billion. Such bans in China, according to Chainalysis and others, have either been ineffectual or leniently enforced.


Several months after the mining ban was implemented, estimates from Cambridge show that even though mining activity in China has significantly decreased, the country still accounted for more than 20% of global Bitcoin mining activity.


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