The Shandong court in China heard a case regarding losses from entrusted investment in virtual currency and ruled that the plaintiff bears the losses

The court in Zhangqiao District, Jinan City, Shandong Province, China recently disclosed a typical case: Liu entrusted his friend Zhang to invest in "Alpha Coin," with the platform showing daily earnings of hundreds of yuan. After the investment, the platform became inaccessible, and Zhang informed Liu that the platform's person in charge had been put on file for criminal investigation. Liu sued Zhang for the return of the investment.

After hearing the case, the court held that investing in virtual currency disrupts financial order and endangers financial security; therefore, the entrusted contract in this case is invalid. Zhang did not profit from the entrusted act, and the investment loss is a risk associated with engaging in illegal financial activities, which should be borne by Liu. The judge reminded that the announcement by seven departments in 2017 and the notice by ten departments in 2021 both clearly state that activities related to virtual currency are illegal financial activities, and investment losses are not protected by law. Even if operated by others on behalf of the investor, as long as the essence is participating in virtual currency trading, it is also not protected by law.