- A company loses $1.6 million after a Beijing court rules that Bitcoin mining contracts are “invalid.”
- The Chaoyang District People’s Court in Beijing has cancelled Bitcoin mining contracts signed in 2019, resulting in a $1.6 million loss for the plaintiff.
- A Beijing court dismissed the complaint on December 15, which stated that the contract between the two parties was “invalid in the first instance.”
In a Bitcoin (BTC) mining contract case against a blockchain corporation, a district court in Beijing has refused monetary compensation.
According to the South China Morning Post, the plaintiff’s Bitcoin mining contract with the blockchain firm was declared “invalid” by the Chaoyang District People’s Court. The plaintiff in the lawsuit paid the blockchain firm 10 million yuan ($1.6 million) for the deployment of mining machines but lost money on his investment.
The South China Morning Post reported in May 2019 that Beijing Phonf Marketing Technology entered into three agreements with Zyzc Blockchain Technology, paying 10 million yuan ($1.6 million) for the deployment of mining machines in the southwestern province of Sichuan, citing several state-run media outlets such as Xinhua News Agency and CCTV.
The complainant, based in Beijing, said he only received 18.5 Bitcoin on his investment and requested an additional 217.17 BTC in damages. However, the court dismissed the petition and ordered the National Development and Reform Commission’s Sichuan branch to investigate any illicit mining in the province.
The court also informed the National Development and Reform Commission’s Sichuan division of the judgement, recommending that any remaining mining farms involved in the case be closed down.
Last summer, China began cracking down on crypto mining, forcing some of the world’s largest Bitcoin mining businesses to leave the country. China’s Bitcoin hash rate share dropped from over 60% to almost zero following the mining restriction. Even after nearly eradicating crypto mining, Beijing announced a robust regulatory push against crypto trading and mining in September, banning all overseas crypto exchanges and restricting even small-scale businesses within.
Before outlawing Bitcoin mining, China controlled nearly two-thirds of the global mining sector; however, it has lost almost all of its clout, with the United States taking the lead.