Chinese Citizen Entrusts Overseas Operation of Virtual Currency "<em>Miner</em>"; Guangzhou Court Rules Contract Invalid

BlockBeats News, September 11th, the Guangzhou Intermediate People's Court of China held a press conference yesterday on the effectiveness of foreign-related civil and commercial trials involving Hong Kong, Macao, and Taiwan, as well as typical cases. In one case involving the overseas operation of virtual currency "mining machines," a purchase contract was deemed invalid for disrupting the financial order of China.

Both Wang and Zheng are Chinese citizens. Through WeChat negotiation, Zheng purchased 24 special servers used for cryptocurrency "mining" from Wang for 1.024 million RMB and paid the full amount. It was agreed that Wang would transport the "mining machines" to Mongolia for operation and maintenance, with the electricity cost borne by Zheng and another individual. After the "mining machines" arrived in Mongolia, frequent online issues occurred, and they were always under Wang's actual control and not delivered. Therefore, Zheng sued to confirm the invalidity of the purchase contract. Wang argued that Mongolian law should apply in this case and claimed the contract was valid. The other individual made it clear that he had no buying and selling relationship with Wang and did not claim rights to the "mining machines."

The final judgment of the Guangzhou Intermediate People's Court held that although this case involves foreign elements, both parties are Chinese citizens. They signed a contract related to the sale of "mining machines" and the transfer of these machines to Mongolia for Bitcoin "mining." This involvement affects China's public interests such as ecological environment and financial security, requiring the application of Chinese law. The "mining machines" in question are specialized equipment for "mining" and Bitcoin mining is a high-energy-consuming activity. Additionally, cryptocurrency transactions are considered illegal financial activities that disrupt China's financial order. Therefore, the contract in question is invalid due to violation of public order and good customs. The court made related judgments based on the degree of fault of each party and the performance of the contract. (Guangzhou Daily)