As crypto investors widely know, China has declared all cryptocurrency transactions illegal and outlawed crypto mining activities. Lately, a court decision further reasserted the government's attitude to stifle any bitcoin mining activity possible.
On December 15, the court of Beijing's Chaoyang District heard a contract dispute over delayed returns from bitcoin mining and ruled that the service contract was "void", according to a notice from the court.
The plaintiff took to the court after the defendant, a mining company it contracted, failed to pay it 278.1654976 Bitcoins, which is worth roughly $18 million as of December 15.
This marks the first time a Beijing court has declared bitcoin mining contracts null, the notice said. Following the ruling, the court urged relevant authorities in Sichuan, an energy-rich province where mining mentioned by the case took place, to "purge" any such remaining activity.
The court ruling, while not surprising, could discourage overseas companies from doing business with Chinese crypto firms. Though China has deemed all crypto transactions, trading and investment illegal, many crypto firms still keep engineering and operational forces in the country while touting services to overseas customers.
China began weighing crypto mining bans as early as 2019 and started to seriously ramp up enforcement in 2021. Virtual currency mining is "energy-intensive, produces high carbon emissions and contributes little to the economy," said a September notice from the National Development and Reform Commission, China's state planner, and such activities "should be eliminated."
The signed contract, the Beijing court said, "is void because it undermines social and public interests." As such, its related rights and interests "should not be protected by the law" and the parties involved "should bear the consequences" of their actions.