According to a report from China, 872 lawsuits related to cryptocurrencies were filed last year, which is about 20% more than in 2019. According to data from the China Judgment Document Network (CJDN), the report shows that Guangdong Province had the highest number at 106. Zhejiang with 103 and Sichuan with 54 complete the top three provinces with the highest number of lawsuits.
The fall of a bitcoin bull market and rising lawsuits
As for the nature of the lawsuits, the CJDN data shows that 409 cases were criminal, while civil cases stood at 457. According to the report, some of the well-known lawsuits recorded during the year include “the Biyin and Bitmain case of the restriction of the non-competition agreement. “The arrest of Renrenbit founder Zhao Dong and the Jiangsu Yancheng Plustoken Mega MLM case” are some of the notable lawsuits of 2020.
In an interview with a local media company, Liu Yang, a lawyer with the Beijing Deheng law firm, offered his perspective on what, in certain cases, could be causing the surge. In his view, Yang narrowed down the cause of the increase in cases to three main problems. First, he points to Bitcoin’s longstanding bull run and how this has led to heightened awareness of the digital asset. Yang says:
Bitcoin is gaining more and more public attention. From early 2019 to late 2020, the virtual digital currency market gradually saw the transition from bear to bull, and the price of bitcoin has increased.
The lawyer explains that as a result of this bull market, “more and more ordinary people are looking forward to learning about Bitcoin and investing in Bitcoin”. Based on this theory, Yang concludes that “more people are investing in Bitcoin and there are more conflicts and disputes”.
Second, Yang also shares his view on why China’s Guangdong and Zhejiang provinces have the most lawsuits. According to Yang, this could be due to the fact that the two regions have “the fastest development speed and the most advanced development concepts in the country”. As a result, the residents of these two regions have a “relatively high degree of acceptance of the virtual digital currency”.
The rising awareness
Third, the lawyer said, another important factor that explains the rise in the number of lawsuits must be the way the judiciary is now handling such cases. Yang claims that the Justice Department, which “paid more attention to currency-related cases” last year, now has “a deeper understanding of virtual digital currencies.” This improved understanding makes it “easier to accept and submit currency-related cases, and the number of cases naturally increases”.
Still, there are some challenges with filing crypto lawsuits. However, Yang believes that the number of lawsuits filed will increase as more of these challenges are addressed.
Do you agree that the number of crypto lawsuits in China will increase as awareness increases? Let us know what you think in the comments section below.
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