Chinese court rules car sale made using digital currency invalid as Beijing’s unrelenting crypto crackdown continues
- A Shanghai court voids a car sale contract, saying that cryptocurrencies do not have the same legal status as national fiat currencies, and should not be circulated in the market
- Ruling shows China’s judicial system has no intention of protecting cryptocurrency-related interests even for transactions related to consumer goods
A court in China has ruled that a car sale made using virtual currency as invalid, highlighting Beijing’s continuing crackdown on cryptocurrency-related transactions in the country.
In one of the first such cases tried in Shanghai, the Fengxian District People’s Court in China’s commercial and financial hub said that the contract for the car in cryptocurrency was “invalid” as it violated mandatory provisions of the law and administrative regulations, according to a statement published last week on its official WeChat account.
“Cryptocurrencies do not have the same legal status as [national fiat] currencies, and should not be circulated like currency in the market,” the statement said.
In May 2019, a buyer surnamed Huang signed an agreement with a Shanghai-based car dealer to buy an Audi A6, priced at 409,800 yuan, with 1,281 units of the virtual currency “Yurimi”, according to the court. However, the company did not deliver the car upon receipt of the virtual currency, which led the buyer to file a lawsuit.
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At that time, major cryptocurrencies bitcoin and ether were trading at levels of around US$8,000 and US$200, respectively, 12 and 4 per cent of their peak levels in November 2021.
