A Beijing district court dismissed a lawsuit against a group of Chinese bitcoin exchanges, ruling that in the absence of clear evidence that exchanges are operating illegally, individuals are responsible for their own trading behavior.
As first reported in the Beijing Morning Post, a Mr. Wang lost RMB 400,000 (~$61,500) trading bitcoin. Faced with this misfortune, Wang attempted to sue a group of bitcoin exchanges — the most notable which was Huobi, one of the region’s largest exchanges — to recoup his losses.
Wang argued that, under the definition laid out in the first chapter of Karl Marx’s Das Kapital, bitcoin should not be classified as a commodity. Marx wrote that a commodity must have both use-value and exchange-value, and Wang argued that since bitcoin does not exist it fails to meet this classification. Consequently, he said, his trades should be invalidated and the exchanges should return his funds.
However, the Beijing Haidian District Court judge ruled that the plaintiff provided no evidence that Huobi and the other exchanges were operating illegally, making him responsible for the risks associated with trading bitcoin.
“[There are] no laws that forbid the investment and trading of bitcoin,” the court stated, according to a translation from cnLedger, “people have the right to freely participate in bitcoin tradings at their own risk.”
Nevertheless, the judge cautioned, bitcoin is not issued by the government and investors should not blindly follow trends.
The ruling came just months after central bank regulators ordered the closure of mainland bitcoin exchanges in China as a corollary to its blanket ban on initial coin offerings (ICOs), which was implemented several days prior.
Some exchanges left the mainland and set up shop elsewhere. Huobi, for instance, is now headquartered in Singapore and plans to branch out into Japan, while BTCC is now based out of London.
Recently, local media outlets have reported that regulators desire to make China less hospitable to cryptocurrency mining, which continues to have an outsized presence in the country. While not implementing an outright ban on the practice, they appear likely to ask local governments and utility providers to cease giving mining companies preferential treatment such as reduced electricity rates and tax incentives.
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Last modified: May 20, 2020 9:11 PM