PANews reported on November 20 that the Shanghai High People's Court recently made a clear statement on a virtual currency issuance and financing service contract dispute case. Virtual currency has property value as a commodity, and it is not illegal for an individual to simply hold it, but commercial entities are not allowed to participate in virtual currency investment or token issuance without authorization. In the case, an agricultural development company (Company X) commissioned an investment management company (Company S) to assist in issuing tokens and paid a service fee of 300,000 yuan, but the tokens were not issued as scheduled. The court determined that the essence of token issuance financing was illegal public financing, and the agreement violated financial regulatory regulations and was invalid, and ordered Company S to return 250,000 yuan.
The court stressed that virtual currency-related businesses are prone to illegal activities such as illegal securities sales and illegal fundraising, which disrupt the financial order. If a contract involving virtual currency violates the mandatory provisions of the law, it will be deemed invalid and the relevant parties will be required to bear the corresponding legal responsibilities. The court reminded enterprises and individuals to be cautious in dealing with virtual currency-related businesses and avoid legal risks.
