TechFlow News: On April 1, according to The Paper, the Xingqing District People’s Court of Yinchuan City recently concluded a civil and commercial dispute arising from a委托 investment in virtual currencies. In this case, the plaintiff entrusted funds to the defendant for virtual currency investment. After failing to recover the invested funds, the plaintiff filed a lawsuit against the defendant on the grounds of “unjust enrichment.” Upon review, the presiding judge determined that the underlying legal relationship was actually one of entrustment contract and explained to both parties the associated litigation risks and legal implications. Ultimately, the plaintiff withdrew the lawsuit against some defendants, while another defendant agreed to return the principal investment amount, and the case was successfully resolved through mediation.
The judge also cautioned that, per judicial interpretations issued by the Supreme People’s Court, entrustment investment contracts signed after the September 4, 2017 joint notice on virtual currency risks issued by the People’s Bank of China and six other departments are deemed invalid, as the entrusted activities violate prohibitive laws and regulations; investors should therefore prudently assess related legal risks.
