Beijing court rules bitcoin mining contracts ‘invalid’, advises local governments to shut down remaining farms
- The Beijing-based plaintiff paid 10 million yuan (US$1.6 million) for the deployment of mining machines in Sichuan province, but failed to recoup its investment
- In May 2021, China’s State Council announced a crackdown on bitcoin mining, on top of the then existing ban on cryptocurrency trading
A court in Beijing has rejected a lawsuit seeking monetary damages from a blockchain firm after its client failed to make money on bitcoin mining, in a case that suggests China’s judicial system has no intention of recognising and protecting cryptocurrency-related interests.
In the first such case tried in China’s capital city, the Chaoyang District People’s Court said on Wednesday that the contracts were “invalid”, according to reports by various state-run media, including Xinhua News Agency and CCTV.
In May 2019, when China still tolerated bitcoin mining, Beijing Phonf Marketing Technology entered into three agreements with Zyzc Blockchain Technology, paying 10 million yuan (US$1.6 million) for the deployment of mining machines in the Liangshan Yi Autonomous Prefecture in southwestern Sichuan province.
At that time some local governments, including those in Sichuan, offered incentives to companies to encourage energy-intensive mining farms so they would consume excessive hydro power.
Liangshan Yi Autonomous Prefecture was one of six “model zones” selected to carry out business activities that could absorb the excess energy being generated.
