The cooperative "mining" contract was deemed invalid, and the court rejected the plaintiff's claim for 570,000 yuan in investment.

According to a report by The Paper's official WeChat account, the Guiyang County People's Court has concluded a case involving a cryptocurrency "mining" contract dispute and ruled to dismiss all of the plaintiff Hu's claims.

Hu entered into a verbal agreement with Zhou, Li, and Peng, under which Hu would fund the purchase of "mining" equipment. A technology company (of which Zhou was a shareholder) would handle the procurement, installation, and hosting services for the equipment. Hu would pay the company a monthly hosting fee of 10% of the profits. Hu paid a total of 555,082 yuan (including 55,000 USD paid via a cryptocurrency app, equivalent to 357,082 yuan, and 198,000 yuan transferred via bank transfer) for the equipment.

In November 2023, the hard drive of the device was lost. In 2024, Hu sued four defendants, including Zhou, for the loss of the device, demanding the return of his investment of 570,000 yuan.

The court held that, according to the "Notice on Further Preventing and Handling Risks of Virtual Currency Trading and Speculation" (Yinfa [2021] No. 237) jointly issued by the People's Bank of China and ten other departments, virtual currency-related business activities constitute illegal financial activities. In this case, Hu entrusted the purchase of equipment for "mining" and used virtual currency to pay for and settle management fees, which damaged the status of legal tender and violated public order and good morals. Therefore, the court ruled that the entrustment contract in this case was invalid.

Regarding the claim for loss, the court held that the delivery of virtual currency was not enforceable and could not be discounted; at the same time, the plaintiff failed to provide evidence to prove the original number of hard drives, the number of lost drives, and the actual loss, and should bear the adverse consequences of failing to provide evidence.

The court ultimately ruled to dismiss all of Hu's claims, and Hu was ordered to bear all of his losses himself.