A report from China says as many as 872 lawsuits relating to cryptocurrencies were filed in the past year, a figure which is approximately 20% more than that of 2019. Using data obtained from the China Judgment Document Network (CJDN), the report shows that the province of Guangdong had the highest number with 106. Completing the top three provinces with the highest number of lawsuits is Zhejiang with 103 and Sichuan with 54.
The Case of a Bitcoin Bull Market and Rising Lawsuits
In terms of the nature of the lawsuits, the CJDN data shows that 409 cases were criminal, while the civil cases amounted to 457. According to the report, some of the well-known lawsuits recorded during the year “include the case of Biyin and Bitmain on the restriction of competition agreement.” The “arrest of Renrenbit founder Zhao Dong and the case of Jiangsu Yancheng Plustoken Mega MLM” are some of the notable lawsuits of 2020.
Meanwhile, in an interview with a local media outlet, Liu Yang, a lawyer with Beijing Deheng Law Firm, offers his perspective on what could be causing the surge in cases. In his assessment, Yang narrows down the cause of the surge in cases to three main issues. Firstly, he points to bitcoin’s long-running bull run and how this led to an increased awareness of the digital asset. Yang says:
Bitcoin is getting more and more attention from the general public. From the beginning of 2019 to the end of 2020, the virtual digital currency market has gradually realized the transition from bear to bull, and the price of bitcoin has risen.
The lawyer explains that as a consequence of this bull market, “more and more ordinary people are looking forward to learning about bitcoin and starting to invest in bitcoin.” Based on this theory, Yang concludes that as “more people invest in bitcoin, and there are more conflicts and disputes.”
Secondly, Yang also gives his perspective on why China’s Guangdong and Zhejiang provinces have the highest number of lawsuits. According to Yang, this could be down to the fact that the two regions have “the fastest development speed and the most advanced development concepts in the country.” Consequently, the residents of these two regions have a “relatively high degree of acceptance of the virtual digital currency.”
The Rising Awareness
Thirdly, according to the lawyer, another important factor that explains the rise in the number of lawsuits has to be the way the judiciary is now handling such cases. Yang asserts that the judicial department, which “paid more attention to currency-related cases” in the past year, now has “a deeper understanding of virtual digital currencies.” This increased understanding makes it “easier to accept and file currency-related cases, and the number of cases naturally increases up.”
Still, there are some challenges when filing crypto lawsuits. Yang believes, however, that as more of these challenges are overcome, the number of filed lawsuits will rise.
Do you agree that the number of crypto-related lawsuits in China will increase with rising awareness? Tell us what you think in the comments section below.