Legal Risks and Response Strategies in Virtual Money Investment

Recently, a case involving overseas Virtual Money investment has attracted widespread attention. In this case, a Singaporean citizen suffered heavy losses from investing in the "MFA Blockchain" project and sued the court for the return of the investment amount, but both appellate courts rejected his lawsuit. This case has triggered people's thoughts on the legal risks of Virtual Money investment.

Case Review

In 2019, Singaporean citizen Pan was introduced to Chinese citizen Tian, and both parties agreed to jointly invest in the "MFA Blockchain" project. Pan transferred 15.74 million yuan to Tian for the purchase of MFA Virtual Money. The project progressed smoothly initially, but later, due to the trading platform delisting MFA trading, the account was locked and could not be traded, resulting in a total loss of principal. Pan filed a lawsuit in court demanding the return of the remaining funds from Tian.

Court Ruling

The Yancheng Intermediate Court held that both parties were aware that they were speculating on Virtual Money, and deemed the contract invalid, with losses to be borne by themselves, thus rejecting Pan's lawsuit request. The Jiangsu High Court upheld the original ruling, stating that investing in foreign Virtual Money violates the mandatory provisions of our country's laws and contravenes public order and good morals, rendering the cooperation agreement invalid, and the losses should be borne by the parties involved.

Legal Analysis

Although there is a negative attitude towards Virtual Money investment in the country, in practice, such disputes do not necessarily result in losing, and the key lies in how responsibility is divided. If the court finds that the investor has a significant fault, the possibility of refunding the amount will decrease; if it is determined that the agent also has fault, then a partial refund may be ordered. Therefore, being able to reasonably explain the investor's claims to the judge is crucial.

For "overseas" investments, it is more critical to agree on the jurisdiction for dispute resolution in advance. For instance, if the jurisdiction is chosen to be in regions that are more friendly to cryptocurrencies, such as Singapore or Hong Kong, there may be a chance to recover the investment amount. However, the jurisdiction agreement needs to be clearly stipulated by both parties and cannot be chosen arbitrarily.

Risk Prevention Suggestions

1. Sign a written contract before cooperation to clarify rights and obligations, and stipulate overseas jurisdiction clauses.

2. Prioritize choosing jurisdictions with a mature legal environment, such as Hong Kong and Singapore.

3. In case of a dispute, comprehensively consider the case circumstances to choose the appropriate litigation institution and strategy.

4. Hire a professional cryptocurrency lawyer to manage risk control and litigation strategy formulation.

Investing in virtual money carries high risks, and investors must remain vigilant and take legal risk prevention measures. Consulting a professional lawyer before the project starts, and reasonably agreeing on the jurisdiction and applicable laws, can avoid many unnecessary troubles. In case of disputes, one should also seek professional legal assistance in a timely manner to maximize the protection of their rights.