Bitcoin Mining Contracts Ruled “invalid” By Beijing Court https://ift.tt/32bFTIM

In a decision that demonstrates China’s judiciary has no intention of acknowledging and safeguarding cryptocurrency-related concerns, a court in Beijing has dismissed a lawsuit demanding compensatory damages from a blockchain business after its customer failed to earn money on bitcoin mining.

According to reports from Xinhua News Agency, the Chaoyang District People’s Court ruled on Wednesday that the agreements were “illegal.” Beijing Phonf Marketing Technology signed three agreements with Zyzc Blockchain Technology in May 2019. This happened while China still permitted bitcoin mining. The company paid a sum of ten million yuan for the deployment of mining machines in the Liangshan Yi Autonomous Prefecture, located in southern Sichuan province.

The signed contract is “invalid” because it “undermines social and public interests,” according to the Beijing court. As a result, the interests and rights associated with it “should not be protected by law,” and the individuals concerned “should suffer the consequences” of their acts.

This may be the first instance a court in Beijing has deemed bitcoin mining contracts unenforceable. Following the decision, the legal system instructed Sichuan authorities, an energy-rich region where the case’s mining occurred, to “purge” any existing activities.

While the court’s decision is unsurprising, it may deter foreign corporations from collaborating with Chinese crypto enterprises. Despite the fact that all crypto trading, transactions, and investing are banned in China, several crypto companies maintain technical and operational activities there while promoting their solutions to international clients.

China began considering crypto mining prohibitions in 2019 and began enforcing them aggressively in 2021. China’s state planner stated in September that mining of virtual currency is “energy-intensive, creates large CO2 emissions, and adds nothing towards the economy and that such operations “should be discontinued.” Only the future will tell how China’s ban on crypto mining will affect the world market on the whole.