Overview of Recent Court Rulings
In a recent press conference, the Guangzhou Intermediate People’s Court shed light on cases involving civil and commercial trials with a foreign element, particularly those related to Hong Kong, Macao, and Taiwan. One notable case discussed involved a transaction concerning the overseas operation of cryptocurrency “mining machines.” Here, the court ruled that the purchase agreement was invalid as it undermined the financial order of China.
Details of the Case
In this case, two Chinese citizens, Wang and Zheng, engaged in negotiations via WeChat, leading to Zheng purchasing 24 specialized servers essential for cryptocurrency mining at a cost of 1.024 million RMB. As per their agreement, Wang was responsible for transporting these devices to Mongolia, where they would be set up for operation and maintenance. Zheng, alongside another individual, agreed to cover the electricity expenses for the equipment.
Disputes and Court Proceedings
However, after the equipment reached Mongolia, Zheng encountered persistent connectivity issues. He alleged that the machinery remained under Wang’s control and had never been fully delivered. As a result, Zheng sought a court declaration to void the purchase contract.
Wang contested Zheng’s claims, asserting that Mongolian law should govern the agreement and that the contract remained valid. The other party involved clarified that he had no transaction ties with Wang and did not assert any rights over the miners.
Court’s Conclusion
Ultimately, the Guangzhou Intermediate People’s Court concluded that despite the transnational aspects of the case, both participants were Chinese nationals. The judges determined that the agreement for the sale and transfer of the mining machines for Bitcoin mining had implications for public interests, including financial security and the ecological environment in China. As a consequence, they ruled that Chinese law should apply to the situation.
The court emphasized that cryptocurrency mining is an energy-intensive undertaking, and transactions involving virtual currencies are classified as illegal financial practices that disrupt the nation’s financial order. Thus, the court declared the contract invalid, citing violations of public policy and good customs, while also considering the accountability of each party regarding the contract’s execution.
(Source: Guangzhou Daily)
