Recently, the Taining Court in Fujian Province adjudicated a new type of contract dispute involving USDT virtual currency as the subject matter. In 2021, Jiang was introduced to Lin, who was engaged in virtual currency trading, and the two cooperated in 'client wealth management' by forming a WeChat group. Between 2021 and 2022, Jiang transferred a total of about 100,000 yuan to Lin via WeChat and bank transfers, of which 76,000 yuan was used to purchase USDT coins, and another 81,000 USDT coins were purchased through channels designated by Lin. All virtual assets were transferred to an overseas trading platform as per Lin's instructions, who exclusively operated the contract trading, ultimately leading to a total loss of funds. The court found that USDT, as a virtual currency, violated the regulations set forth by the People's Bank of China and ten other departments (regarding further prevention and handling of risks associated with virtual currency trading speculation), rendering the related civil legal actions invalid, and ruled to dismiss all of Jiang's claims.
This case exposes the multiple risks currently present in the field of virtual currency trading:
Firstly, the prevalent 'KOL-led trading' model in cyberspace is actually a high-risk operation. So-called 'investment mentors' create an illusion of profit through community engagement, enticing investors to participate in high-leverage contract trading.
Secondly, the 'client wealth management' services actively offered by strangers often involve opaque operations. In this case, Lin did not disclose transaction details nor establish an effective risk control mechanism.
Thirdly, the laws of our country have clearly stated that financial activities related to virtual currencies are illegal financial activities, and even if investors encounter fraud or operational errors, it is difficult to obtain judicial relief.
Special reminder: Any investment invitations involving 'mentor-led trading', 'contract following', 'platform trading', etc., which have financial attributes, may be scams. Investors must also recognize the inherently unprotected nature of virtual currency trading under the law and remain highly vigilant against 'guaranteed profit schemes' pushed by strangers via social media, guarding against the dual risk of financial loss due to participation in illegal financial activities with no avenue for complaints.
News expansion:
The USDT client wealth management dispute case adjudicated by the Taining Court stands in stark contrast to the recent case in which Ms. Cheng from Hefei was defrauded in virtual currency. In the Taining case, Jiang lost 100,000 yuan by entrusting Lin to operate USDT contract trading, and the court dismissed the lawsuit on the grounds that virtual currency trading is not protected by law.
In the Hefei case, however, Ms. Cheng was deceived by Sun and others who fabricated facts to steal USDT worth 2 million yuan during the exchange process, leading the police to file a fraud case. The difference between the two cases is: in the civil domain, the risks of virtual currency trading are borne by the investor and are not protected by law; in the criminal domain, if virtual currencies are illegally obtained through fraudulent means, it may still constitute a crime, but the cost of rights protection is high.
