Beijing Court Sides with Crypto Exchange Despite Allegation It Violated Crypto Ban
Beijing court has recently concluded a case that a bitcoin trader who was sent 5 bitcoins in error must repay it to the exchange in spite of the trader’s allegation that the exchange violated the crypto trading ban in China.
According to the judgement made on July 31 and released this Thursday, the intermediate court has upheld the verdict made by its district court early this year that a bitcoin trader’s proceeds from selling 5 bitcoins received by mistake was unjust enrichment and must return it as soon as possible.
The dispute stemmed from a system bug on the exchange named Coinnice where the bitcoin trader named Li Jianfeng traded his bitcoins since March 8, 2017. On the platform, Li actually bought 6.9195 bitcoins in total, but later sold out 13.029 bitcoins during March to May 2017, among which 5 were sent to his account in error caused by a system bug.
In this context, Li obtained an extra of 41,305.34 yuan ($6,100) from the 5 bitcoins which he had no legal right to possess. After he refused the requests from the exchange to return the funds, the company brought a lawsuit against him to Beijing district court in November 2017.
Unsatisfied with the district court’s decision, Li insisted that the exchange should bear the consequences of its own fault, and appealed the decision to a higher intermediate court as he argued the exchange had operated in violation of the crypto trading ban in China, and its businesses should not be protected by laws, claiming the first trial ruled that he should return the funds to Coinnice was a validation of the company’s legality to trade and profit on bitcoin.
The court explained, “in this case, it does not have any impact on Li’s liability to return the profits he received with no legal basis whether or not Coinnice’s operation as a bitcoin trading platform has violated relevant rules.” As such, the court denies his appeal and the decision is final.
Bitcoin has been ruled out as fiats but its tight connection to fiats has given rise to quite a number of disputes in these years. Currently 274 bitcoin-related lawsuits have been brought to courts in China, according to China Judgments Online.