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Beijing court denies financial compensation in the Bitcoin mining contract

The plaintiff in the lawsuit is demanding 217.7 BTC for its investment in the Bitcoin mining infrastructure.

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A Beijing District Court has denied financial compensation in a Bitcoin (BTC) mining contract against a blockchain company.

The Chaoyang District People’s Court on Wednesday declared the Bitcoin mining contract between the plaintiff and the blockchain company to be “invalid,” as the South China Morning Submit reported on December 16, but the company that used the mining equipment suffered a loss his investment.

The Beijing plaintiff claims he earned only 18.5 Bitcoin on his investment and is demanding an additional 217.17 BTC for his loss.

The court rejected the plea and also ordered the Sichuan branch of the National Development and Reform Commission to investigate all illegal mining activities in the province.

China began its crypto mining practice last summer, which resulted in some of the largest bitcoin miners in the country having to migrate. China’s bitcoin hash rate has dropped from over 60% to near zero as a result of the mining crackdown. But even after the almost complete abolition of cryptocurrency mining, Beijing announced a comprehensive policy against cryptocurrency mining and trading back in September, immediately banning both small operations in the country and all foreign cryptocurrency exchanges.

China’s Bitcoin mining market share in April 2021. Source: CCAF

China’s Bitcoin mining market share in July 2021. Source: CCAF

The crypto penetration policy led by Beijing has become increasingly strict over time. Although Chinese traders have found ways to circumvent the ban on cryptocurrency trading on many occasions, cryptocurrency mining has almost died out in mainland China.

The latest lawsuit on a Bitcoin mining contract underscores China’s stance on crypto-related activities. It sends a clear message to the public that the judicial system does not protect or recognize crypto-related cases.

Annie

Championing positive change through finance, I've dedicated over eight years to sustainability and environmental journalism. My passion lies in uncovering companies that make a real difference in the world and guiding investors towards them. My expertise lies in navigating the world of sustainable investing, analyzing ESG (Environmental, Social, and Governance) criteria, and exploring the exciting field of impact investing. "Invest in a better future," I often say. That's the driving force behind my work at Coincu – to empower readers with knowledge and insights to make investment decisions that create a positive impact.