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According to the Shanghai Hongkou District Court statement in a recent encrypted case, Ethereum and other virtual currencies are not considered money. However, they are still protected by the law that considers them "property".
The old case brings new sight on Cryptos in China
One of the attempted cryptographic transactions between an individual investor and a Beijing-based technology company has encountered more difficulties. Many, in fact, that in the end the company has requested the cancellation of the transaction. As the investor refused to respond to the company's attempts to contact, the incident was brought to the attention of the Shanghai Hongkou District Court.
The episode includes several events, dating back to August 2017, when the aforementioned company issued tokens to increase Bitcoin and Ether. Less than a month later, on September 4, they decided to return the funds raised in Ethereum to one of the investors in response to the new rectification requirements issued by the state. Furthermore, there were operational errors with the account of another investor that the company attempted to return to Ethereum.
After the company discovered the situation, they attempted to contact the investor and request a refund, but this person refused to communicate. The company believed that the payment made for the amount of 20 ETHs was carried out incorrectly, which is why they requested a refund. But, because the investor refused to cooperate, the accident quickly became a district court case.
The initial decision of the Court is that the company's request is justified and that they have the right to request restitution, according to the law. This was insufficient for the investor, who argued that the country's ban on the circulation of Ethereum should be taken into account. This would mean that there is no legal basis for the case.
According to the new court decision, Ether can still be protected by law as a property, regardless of the traffic ban.
Shanghai Hongkou District Court: Ether ($ ETH) as a property in the general legal sense is under the protection of the laws.
– cnLedger (@cnLedger) September 28, 2018
The Court has defended this by making several points. The first is that while it is true that cryptocurrencies are not recognized as monetary attributes, it is not denied that Ethereum can be protected by law as property. Secondly, the case is based on the claim of unjust enrichment, which means that someone took advantage of a platform error to get benefits and harm another.
To hear a case involving the ownership of 20 ETHs, the court states: China does not recognize the monetary properties of "virtual currencies" including Ether. However, we can not deny the fact that Ether should be protected by law as a general property https: //t.co/AnK7QlocGz
– cnLedger (@cnLedger) September 28, 2018
According to the current law, after having mistakenly transferred the virtual currency, its recipient may be asked to return the property, which, in this case, involves 20 ETHs. If the other party refuses to cooperate, the first party has the right to sue. Therefore, the argument of the investor concerning the lack of the legal basis for the case was rejected.
Most of the problems that emerged from the accident could have been prevented if adequate regulations existed, which was not the case at the time of the accident. The situation could be even worse for the company concerned. Because users of the exchange platform can create an account based on nothing but an alias, it can be almost impossible to file a case against an individual if this type of incident should happen again.
This time, the company was lucky that the investor used his name for his trading account. Similar cases that may occur in the future will probably not lead to a similar result.
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