Mr. Chen entrusted his colleague Mr. Xu to buy virtual currency, but the website where he bought the virtual currency was shut down and he could not withdraw the money. Mr. Chen filed a lawsuit against Mr. Xu and asked him to bear his investment losses. Recently, the court dismissed Mr. Chen's lawsuit.
In 2020, Mr. Chen began to try to invest in virtual currency. After learning that his colleague Mr. Xu had connections to invest overseas and promised to guarantee principal and interest, based on his trust in Mr. Xu, he transferred a total of more than 1.84 million yuan to Mr. Xu and his designated third-party account through various means such as transfer and cash to invest in a certain virtual currency. During this period, he only received more than 56,000 yuan in return from Mr. Xu. After a transaction, Mr. Chen found that the website for purchasing the virtual currency could not be opened and his money could not be returned. Mr. Chen took Mr. Xu to court with a complaint, demanding that Mr. Xu compensate him for his loss of more than 1.78 million yuan.
The case was later heard in the Donghu People's Court of the Wuhan Donghu New Technology Development Zone People's Court. In court, Mr. Xu argued that the basic facts stated by Mr. Chen were false, and that he had not helped Mr. Chen invest in a certain virtual currency. The investment was all done by Mr. Chen himself through his personal account on the virtual currency website platform. It was an investment relationship established with the website, not a commissioned investment relationship established with himself. Secondly, the transfer between the two was not the money he helped Mr. Chen invest in virtual currency, but the sale, exchange or other virtual currency transactions between the two parties, and the amount of transactions between the two parties was wrong. The difference in the amount in the transfer record was more than 340,000 yuan, not the more than 1.78 million yuan claimed by Mr. Chen.
After trial, the court found that from December 2021 to September 2022, Mr. Chen transferred, instructed payments, and made cash payments to Mr. Xu totaling more than 1.05 million yuan. Combined with a certain chat software and Mr. Xu’s statement, it was a virtual currency transaction. The court believed that the amount could constitute a relationship payment under the entrustment contract. According to the (Notice on Further Preventing and Dealing with the Risks of Speculation in Virtual Currency Transactions), there are legal risks in participating in virtual currency investment and trading activities. Any legal person, non-legal person organization or natural person who invests in virtual currency and related derivatives violates public order and good morals, and the relevant civil legal acts are invalid, and the losses caused thereby shall be borne by themselves. As a person with full civil capacity, Mr. Chen should be aware of the legal risks of virtual currency transactions in my country. The losses caused by his virtual currency exchanges through Mr. Xu should be borne by himself. In the end, the court ruled to dismiss Mr. Chen’s lawsuit. (The parties in the full text are pseudonyms)
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