An announcement from China states as many as 872 lawsuits relating to cryptocurrencies in the past year, which is approximately 20% more than that of 2019.
Using data collected from the China Judgment Document Network (CJDN), the record points that Guangdong’s province had the highest number, with 106. Making 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 lawsuits’ nature, the CJDN data shows that 409 cases were criminal, while the civil cases amounted to 457. As claimed by the report, some of the well-known lawsuits reported 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.
Meantime, in a conversation with a local media outlet, Liu Yang, a lawyer with Beijing Deheng Law Firm, offers his viewpoint on what could be causing the surge in cases. In his assessment, Yang narrows down the cause of the flood in cases to three main issues.
Firstly, he points to bitcoin’s long-running bull run and how this led to a digital asset’s heightened awareness. 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.
As a result 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 assumes that “more people invest in bitcoin, and there are more conflicts and disputes.“
Secondly, Yang also explains why China’s Guangdong and Zhejiang provinces have the highest number of lawsuits. As claimed by 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, these two regions’ residents have a “relatively high degree of acceptance of the virtual digital currency.”
The Rising Awareness
Thirdly, as shared by the lawyer, another crucial factor that explains the rise in the number of lawsuits has to be how the judiciary is now handling such cases.
Yang states 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.”
However, there are some hurdles when filing crypto lawsuits. Yang believes that as more of these challenges are overcome, the number of filed lawsuits will rise.
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