Court Ruling Invalidates Crypto Mining Contracts in China Close Bitcoin Farms – Mining Bitcoin News

A Beijing court has ruled “invalid” three investment agreements for Bitcoin mining operations in Sichuan. A claim for damages was rejected in the case because it was seen as an indication that the Chinese judiciary would not protect crypto-related interests.

Beijing court declares Bitcoin mining contracts invalid

The Chaoyang District People's Court in the Chinese capital recently dismissed a lawsuit seeking damages from a crypto company. It was filed by one of its clients who was not seeing a return on his Bitcoin mining investments, Hong Kong daily South China Morning Post reported, citing mainland state media.

Beijing Phonf Marketing Technology, the plaintiff, entered into three agreements with Zyzc Blockchain Technology to deploy mining hardware in Sichuan in May 2019, paying 10 million yuan ($1.6 million). At the time, the central government was still tolerant of crypto mining, while some local authorities, including in this province, may Bitcoin farms to harness excess hydropower.

China banned crypto-related activities such as trading back in 2017, but the government only got involved in mining this spring. In May, the State Council decided to crack down on the industry following President Xi Jinping's promise to achieve carbon neutrality in the next four decades. The government offensive has since spread to provinces such as Sichuan.

In its plea, Beijing Phonf announced that it was 18.35 had earned BTC, which was worth around $904,000 at the time of writing, but less in previous periods, and was asking for another $278.17 from the company it worked with BTC in balance. In the first case of its kind, the court found that the mining contracts were invalid, according to the report. The newspaper notes that the decision suggests that the Chinese judicial system does not intend to recognize or protect interests related to cryptocurrencies.

Sichuan moves to close mining farms affected by the court's decision

After dismissing the lawsuit, the Chaoyang District Court notified the Provincial Department of the National Development and Reform Commission ( NDRC ) in Sichuan. Economic planner officials took steps to close the remaining mining facilities involved in the case and targeted other coin minting projects.

Inspections to identify illegal mining activities were also carried out elsewhere. Authorities in Zhejiang, for example, recently raided nearly two dozen government organizations, including universities, and found that 14 of them were mining crypto.

In addition to Sichuan and Zhejiang, this year's government crackdown on the mining sector has affected a number of provinces such as Xinjiang, Qinghai, Yunnan, Inner Mongolia, Anhui, and Hebei. In November also the NDRC announced it is about state-owned industrial companies involved in the extraction of digital currencies.

Do you think this decision by the Beijing court will determine how the Chinese judiciary deals with similar cases in the future? Share your thoughts on this topic in the comments below.

Lubomir Tassev

Lubomir Tassev is a tech-savvy journalist from Eastern Europe who likes Hitchens' quote: "Being a writer is what I am, not what I do." In addition to crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.

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