TechFlow news, on November 18, according to the China Court Website, the Xiangyin County People's Court in Hunan Province recently heard a case involving the repayment of a loan using virtual currency. The court ruled that virtual currencies do not possess legal status or legal tender properties equivalent to fiat money, and therefore, the borrower’s act of repaying debt with virtual currency is invalid.
The case showed that debtor Wang Mou repaid a 20,000-yuan debt via the "TR Foreign Currency Platform" using virtual currency. This platform was later identified by public security authorities as suspected of involvement in a virtual currency-related online pyramid scheme. Citing the "Notice on Further Preventing and Managing Risks of Virtual Currency Trading Speculation" issued in September 2021 by the People's Bank of China and nine other departments, the court determined that the repayment violated financial regulatory order.
The court emphasized that any investment in virtual currencies and related derivatives by legal persons, unincorporated organizations, or individuals that runs counter to public order and good customs renders the relevant civil legal acts invalid, and losses arising therefrom must be borne by the parties themselves. In this case, the final ruling requires the debtor to fulfill the repayment obligation using legal tender.
