Filing a Lawsuit Against Tether in China
A recent press release from the Nanchang People’s Court revealed that a plaintiff had attempted to prove that Tether is a legally issued fiat currency in order to seek judicial relief. This marks the second court decision in China that declares crypto lending as an activity outside the country’s legal protection.
The Lawsuit Details
The plaintiff, using the alias Xiao Ming, claimed that another individual named Xiaogang borrowed money from them in April 2021 with the intention of speculating in USDT coins. However, when the loan repayment deadline arrived, Xiaogang failed to fulfill the terms. Xiao Ming filed a lawsuit against Xiaogang to seek legal action.
The Outcome of the Lawsuit
The initial judgment rejected the plaintiff’s case, leading Xiao Ming to appeal to the second-instance court. Unfortunately, the appeal was dismissed, and the original judgment was upheld. The judge emphasized that participating in virtual currency investment and trading activities carries legal risks and that any losses resulting from violations of public order and good customs must be borne by those involved.
An Ongoing Crypto Ban in China
China has previously banned financial institutions and payment companies from offering cryptocurrency-related services. The recent court ruling reaffirms the government’s commitment to maintaining this ban and cracking down on virtual currency speculation to protect people’s assets.
Hot Take: China Continues Its Strict Stance on Crypto
The rejection of Tether as a legally issued fiat currency in China highlights the country’s unwavering position on crypto lending and virtual currency activities. With multiple bans implemented over the years, including the recent prohibition on financial institutions providing cryptocurrency services, it is evident that Chinese authorities are determined to maintain strict regulations in this sector. This court ruling serves as a reminder of the legal risks associated with virtual currency investments and the potential invalidation of civil legal actions in violation of public order. China’s ongoing crackdown on crypto speculation is aimed at safeguarding individuals’ properties and promoting financial stability.
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