🚨 Is trading cryptocurrencies on the mainland legal or 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 the mainland has pondered this question; let's refer to this case from Shanghai.

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

In 2017, a certain agricultural development company (Company X), optimistic about the development of virtual currencies, signed a "Blockchain Incubation Agreement" with a certain investment management company (Company S), paying 300,000 yuan in service fees for token issuance. However, the plan ultimately fell through, leading Company X to sue the People's Court, seeking to terminate the contract and for Company S to return the 300,000 yuan service fee. The People's Court of Songjiang District ultimately determined the agreement to be invalid and ordered Company S to return 250,000 yuan.

The People's Court, upon review, considered that token issuance financing refers to the financing entity illegally selling and circulating tokens to raise Bitcoin, Ethereum, and other so-called "virtual currencies" from investors. Essentially, this is an act of unauthorized public financing, suspected of illegal sale of token vouchers, illegal issuance of securities, as well as illegal fundraising, financial fraud, pyramid schemes, and other illegal criminal activities. Therefore, no organization or individual may illegally engage in token issuance financing activities.

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

In summary, simply holding virtual currency as an individual is not illegal, but one is not allowed to issue tokens independently. The act of issuing tokens is not only unprotected but may also be illegal!

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