Shanghai Court: Individuals Simply Holding Virtual Currency Is Not Illegal
Recently, the Shanghai High People's Court made a clear statement regarding a contract dispute over virtual currency issuance and financing services, stating that virtual currency, as a commodity, has property value, and individuals simply holding it is not illegal. However, commercial entities are not allowed to participate in virtual currency investment or token issuance without authorization. In the case, an agricultural development company (Company X) entrusted an investment management company (Company S) to assist in issuing tokens and paid a service fee of 300,000 yuan, but the tokens were not issued on time. The court determined that the essence of token issuance financing was illegal public financing, and the agreement violated financial regulatory provisions and was thus invalid, ordering Company S to return 250,000 yuan.
The court emphasized that businesses related to virtual currency are prone to illegal activities such as illegal securities issuance and illegal fundraising, disrupting the financial order. Contracts involving virtual currency that violate mandatory legal provisions will be deemed invalid, and the relevant parties will bear corresponding legal responsibilities. The court reminds enterprises and individuals to approach virtual currency-related businesses cautiously to avoid legal risks.
