In recent years, civil disputes involving virtual cryptocurrencies have surged, particularly following the release of the People’s Bank of China and nine other departments’ Notice on Further Preventing and Handling the Risks of Virtual Currency Trading and Speculation on September 24, 2021—commonly referred to as the “9.24 Notice.” This regulatory shift has significantly influenced judicial attitudes toward cryptocurrency-related claims, especially those seeking the return of digital assets after delivery.
The core legal issue in such cases is simple: one party delivers cryptocurrency (e.g., Bitcoin, USDT) to another under arrangements labeled as loans, investments, or borrowing agreements, only to later demand its return when the recipient fails or refuses to comply. The central question becomes: Can such a request for return be supported by law? The answer hinges on whether virtual cryptocurrencies qualify as legally recognized “property” under civil law—and how courts interpret relevant regulations and public order principles.
Understanding Cryptocurrency as a Legally Recognizable “Object”
A key threshold issue is whether virtual currency constitutes a “thing” (物) under civil law—a prerequisite for claims like restitution of property or return of borrowed items. While cryptocurrencies are not legal tender in China, multiple official documents acknowledge their nature as virtual commodities.
The 2013 Notice on Preventing Bitcoin Risks stated that “Bitcoin should be regarded as a specific type of virtual commodity,” clarifying it lacks legal tender status but does possess economic value. This characterization was reaffirmed in the 2021 Notice on Preventing Risks of Virtual Currency Trading and Speculation, which reiterated that virtual currencies are not real money, do not have compulsory legal tender power, and must not circulate as currency—but notably did not declare them illegal or prohibit ownership.
Under Article 127 of the Civil Code of the People's Republic of China, “data and network virtual property shall be protected in accordance with the law.” Though the term “virtual property” remains broadly defined, courts have increasingly treated cryptocurrencies like Bitcoin as virtual assets with property characteristics, based on three core attributes:
- Value: Requires real-world resources (electricity, hardware) to mine; can be exchanged for fiat currency.
- Scarcity: Supply is algorithmically capped (e.g., 21 million BTC).
- Exclusivity and Control: Owners can securely hold, transfer, and manage their holdings via private keys.
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Thus, despite regulatory restrictions on trading and investment, mere possession and transfer between individuals do not automatically violate public order and good customs—especially when no financial intermediation or speculative activity is involved.
Judicial Trends: When Return Claims Succeed or Fail
Court outcomes vary widely across jurisdictions, largely due to differing interpretations of the 9.24 Notice and the underlying nature of cryptocurrency. However, a clear pattern emerges: claims framed as "restitution of property" (返还原物纠纷) are more likely to succeed than those based on loan or investment contracts.
✅ Cases Supporting Return Requests
Several landmark rulings affirm the property status of cryptocurrencies:
- Jiangxi Wanzai County Court (2019) Gan 0922 Min Chu No. 1113: The court ruled that Bitcoin, though not legal tender, is a “special virtual commodity” whose holding and transfer are not prohibited. A claim for return of 30 BTC was upheld under a restitution of property cause.
- Tianjin Hebei District Court (2021) Jin 0105 Min Chu No. 2374: The court found Bitcoin qualifies as virtual property due to its value, scarcity, and exclusivity. It emphasized that while investment may breach public order, simple borrowing or holding does not, supporting a claim for 3.4 BTC.
- Beijing Shijingshan District Court (2021) Jing 0107 Min Chu No. 3360: Despite being filed post-9.24, the court applied Property Law principles (pre-Civil Code) and supported a claim for 33,000 Litecoin, citing that restitution claims are not subject to statutes of limitations.
These decisions reflect a growing judicial consensus: ownership rights over virtual assets persist even if certain uses (like speculation) are restricted.
❌ Cases Rejecting Return Based on Legal Uncertainty
Conversely, some courts reject claims on procedural or policy grounds:
- Zhejiang Taizhou Intermediate Court (2022) Zhe 10 Min Zhong No. 352: The court held that Bitcoin lacks a “legally recognized economic valuation standard” and dismissed the case for failing to meet civil litigation criteria.
- Xi’an Intermediate Court (2020) Shaan 01 Min Zhong No. 11210: Ruled that without feasible economic evaluation, Bitcoin cannot be treated as enforceable property—effectively barring judicial enforcement.
Notably, these rejections often stem from caution around regulatory ambiguity rather than outright denial of cryptocurrency’s value.
⚠️ Cases Dismissed Due to Insufficient Evidence
Other dismissals arise not from legal invalidity but from failure to prove delivery:
- Shenzhen Luohu District Court (2019) Yue 0303 Min Chu No. 34908: Plaintiff failed to prove the recipient controlled the wallet address; claim for 79.8 BTC denied due to evidentiary insufficiency.
- Ningbo Intermediate Court (2021) Zhe 02 Min Zhong No. 3554: No written agreement or chat records proving intent to borrow USDT; claim rejected due to lack of proof.
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This highlights a critical takeaway: even if cryptocurrency is recognized as property, plaintiffs must rigorously document transfers and agreements.
Choosing the Right Legal Cause: Strategy Matters
Given inconsistent rulings, selecting the correct cause of action is crucial:
| Preferred Cause | Why It Works |
|---|---|
| Restitution of Property (返还原物纠纷) | Directly asserts ownership; avoids contract validity issues; treated as a real right claim |
| Borrowing Contract Dispute (借用合同纠纷) | Acceptable if informal agreement exists; but may be challenged under "public order" arguments |
Avoid framing claims as loan contracts or investment agreements, as these are frequently invalidated under the 9.24 Notice for violating public order—especially if interest or profit-sharing is involved.
Instead, treat personal crypto loans as non-commercial borrowings, akin to lending a laptop or car. As long as no financial service or speculation is implied, courts may uphold the return obligation.
Frequently Asked Questions (FAQ)
Q: Does the 9.24 Notice make all crypto transactions illegal?
A: No. It prohibits financial institutions from facilitating crypto services and bans speculative investment as contrary to public order. However, private holdings and peer-to-peer transfers are not explicitly outlawed.
Q: Can I sue someone to get back my Bitcoin?
A: Yes—if you can prove ownership and delivery. Courts increasingly recognize crypto as virtual property. Success depends on your cause of action and evidence quality.
Q: What if the defendant no longer has the coins?
A: Some courts allow monetary compensation based on market value at the time of judgment, especially if both parties agree. Otherwise, you may need to pursue damages separately.
Q: Is interest recoverable on lent cryptocurrency?
A: Unlikely. Charging interest transforms the act into a financial transaction, which likely violates public order under the 9.24 Notice. Only principal return is typically enforceable.
Q: Are arbitration awards more favorable than court rulings?
A: Possibly. In one recent case, an arbitral tribunal ruled that personal crypto management between individuals does not constitute illegal financial activity—showing greater flexibility than some courts.
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Conclusion
While China maintains a strict stance against cryptocurrency speculation and financialization, the fundamental property-like nature of digital assets remains legally viable in civil disputes. Courts are increasingly willing to recognize virtual currencies as recoverable property—especially when claims are grounded in ownership rather than investment.
To maximize chances of success:
- Frame claims as restitution of property, not loans or investments.
- Maintain clear records: wallet addresses, transaction hashes, chat logs.
- Avoid any implication of profit-making or financial services.
- Act promptly—while statutes of limitations don’t apply to ownership claims, evidence degrades over time.
As regulatory clarity evolves, so too will judicial consistency. For now, those navigating crypto disputes must combine technical understanding with strategic legal framing—ensuring their digital assets aren’t just secure on-chain, but also enforceable in court.