Cooperation in "Mining" equipment loss compensation lawsuit, the court in Hunan Province, China ruled that the contract related to Virtual Money is invalid, and losses are borne by the parties themselves.

On November 21, recently, the People's Court of Guiyang County, Hunan Province, China, concluded a case involving a virtual currency “mining” contract dispute, in which the plaintiff Hu cooperated with others to carry out virtual currency “mining” activities, and later sued the court for the return of 570,000 yuan due to the loss of “mining” equipment, and the court rejected all the claims of the plaintiff Hu in accordance with the law. Hu and Zhou are friends. A technology company was established in May 2021, with Zhou as one of the shareholders, and Li and Peng participated in the company's “mining” business through an affiliated relationship. The two parties agreed to cooperate in “mining”, and Hu paid 55,000 US dollars (equivalent to 357082 yuan recognized by both parties) to Zhou through the virtual currency APP, and entrusted Cao to transfer 198,000 yuan to Zhou's bank, totaling 555082 yuan, all of which were used to purchase servers, hard disks and other “mining” equipment, which was managed and operated by a technology company. In July 2022, the equipment was transferred to Zhou's kitchen for storage, and Hu only paid Zhou's electricity bill thereafter. In November 2023, Li removed part of the hard drive due to an economic dispute with Zhou. Although after mediation by the police station, Li returned 82 hard drives, Hu claimed that the hard disks were still missing, and the negotiation between the two parties was fruitless. In 2024, Hu sued the four defendants for the loss of equipment, demanding the return of 570,000 yuan in capital contributions. After hearing, the court held that according to Article 1 of the Notice on Further Preventing and Handling the Risk of Speculation in Virtual Currency Transactions jointly issued by the People's Bank of China and other ten departments, it is stated that virtual currency does not have the same legal status as legal tender, does not have legal compensation, and should not and cannot be used as currency in the market. Virtual currency-related business activities are illegal financial activities. There are legal risks associated with participating in virtual currency investment trading activities. Any legal person, unincorporated organization or natural person investing in virtual currency and related derivatives is contrary to public order and good customs, and the relevant civil legal acts are invalid, and the losses arising therefrom shall be borne by them. In this case, the equipment purchased by Hu was used for “mining”, and the payment and settlement of management fees were made in virtual currency, which damaged the status of legal tender and violated public order and good customs. The entrustment contract involved in the case should be found to be invalid.