The Hunan court ruled that repayment of a loan with virtual currency is invalid in a lending dispute case

According to ChainCatcher news and the China Court website, the People's Court of Xiangyin County, Hunan Province, recently heard a case involving the repayment of a loan with virtual currency. The court ruled that virtual currency does not have the same legal status and enforceability as legal tender, and the borrower's use of virtual currency to repay the debt is invalid.

The case shows that the debtor, Wang, used virtual currency to repay a debt of 20,000 yuan through the "TR Foreign Currency Platform," which was later identified by public security authorities as being involved in virtual currency network pyramid schemes. The court cited the notice issued by the central bank and ten other departments in September 2021, titled "Notice on Further Preventing and Handling Risks of Speculation in Virtual Currency Transactions," and determined that the repayment behavior violated financial management order.

The court emphasized that any legal person, non-legal person organization, or natural person investing in virtual currency and related derivatives in violation of public order and good customs will have their related civil legal acts deemed invalid, and any resulting losses must be borne by themselves. The final judgment of this case requires the debtor to fulfill the repayment obligation in legal tender.