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Is trading cryptocurrencies in mainland China illegal?

The latest ruling in a Shanghai case has provided an answer!

Is trading Bitcoin and other virtual currencies illegal? I believe every talented trader in mainland China has pondered this question; let's refer to this case in Shanghai.

Recently, the People's Court of Songjiang District in Shanghai concluded a case involving a service contract dispute arising from the validity of a virtual currency issuance financing service contract.

In 2017, a certain agricultural development company (Company X) signed a 'Blockchain Incubation Agreement' with an investment management company (Company S) because it was optimistic about the development of virtual currencies, paying 300,000 yuan in service fees for token issuance. However, the plan ultimately fell through, and Company X sued the People's Court, requesting the contract be rescinded and Company S return the 300,000 yuan service fee. The Songjiang District People's Court ultimately ruled that the agreement was invalid and ordered Company S to return 250,000 yuan.

The People's Court held that token issuance financing refers to the financing entity collecting Bitcoin, Ethereum, and other so-called 'virtual currencies' through illegal sale and circulation of tokens, which is essentially an act of unauthorized public financing, suspected of illegal token issuance, illegal securities issuance, illegal fundraising, financial fraud, pyramid schemes, and other illegal criminal activities. Therefore, no organization or individual may engage in illegal token issuance financing activities.

Participating in virtual currency investment trading carries legal risks; any civil legal actions that violate mandatory legal regulations are invalid, and any resulting losses must be borne by the individual.

⚠️ To summarize, personally holding virtual currencies is not illegal, but issuing tokens on one's own is not allowed; token issuance is not only unprotected but may also be illegal!