China Cryptocurrency Disputes: What Chinese Courts Will and Won't Enforce for Foreign Parties

Introduction

The governing instrument is the Notice on Further Preventing and Disposing of the Risks of Virtual Currency Trading and Speculation issued on 24 September 2021 by the People's Bank of China and nine other departments (银发〔2021〕237号), commonly called the "9·24 Notice." Its core positions: virtual currency does not have the legal status of fiat currency and must not circulate as money; virtual-currency business activities are illegal financial activities; and overseas exchanges providing services to onshore residents are likewise unlawful. What the notice does not do matters just as much — it does not make simply holding Bitcoin a crime. That distinction is the hinge of the entire case law.

Two Tracks: Contract Validity vs Property Protection

Chinese courts have settled into two lines of authority, and a foreign party needs to know which line its claim falls on.

1. Trading, investment and lending contracts are usually void

Where the claim is to enforce a contract in virtual currency — a trading agreement, an investment in a crypto project, a loan repayable in coins — most courts hold the contract void for violating public order and good morals under Article 153(2) of the Civil Code. The consequence is harsh and consistent: the loss stays where it lies, and the court will generally not order return of the coins or the fiat paid for them. The logic is that enforcing such a contract would be enforcing an illegal financial activity.

2. The coins themselves are increasingly protected as property

In parallel, a growing line of cases — including decisions from courts in Shanghai and elsewhere — treats Bitcoin and comparable coins as "network virtual property", a category recognised in Article 127 of the Civil Code. In that line, a claim based on unlawful possession, unjust enrichment or property damage — someone stole the coins, or a platform refuses to return them — can succeed, with the court ordering return of the coins or compensation measured at market value. The key is that the claimant is vindicating property rights, not asking the court to enforce a trading contract.

Where the Line Is Drawn in Practice

The dividing line is the nature of the underlying transaction. If the dispute arises from a prohibited financial activity — trading, speculation, fundraising, lending — the contract path is closed. If it arises from a wrong done to property — theft, conversion, refusal to return after a relationship ended — the property path is open. There is, however, no unified judicial interpretation or guiding case that has finally settled the boundary, so outcomes continue to vary by region and by the precise facts. Any assertion that crypto claims are "always invalid" or "always protected" is wrong in both directions.

Practical Consequences for a Foreign Party

• Do not litigate a trading loss as a contract claim. Framing matters: a claim that reads as "enforce my crypto investment contract" invites a voidness defence and dismissal.
• Frame property wrongs as property claims. If coins were taken, frozen or not returned, plead unlawful possession, unjust enrichment or property damage and anchor the claim to Article 127 and the Civil Code's property rules.
• Expect enforcement and jurisdiction questions. Even a favourable judgment must be enforced, and for cross-border parties the same issues arise as in any China dispute — see China Contract Disputes: Breach, Termination and Damages and Enforcing Foreign Arbitral Awards in China: A Practical Guide.
• Treat the regulatory risk as the first question. Before any claim, a party should assess whether its own conduct falls inside the 9·24 Notice's prohibition, because that will colour everything a court is willing to do.

How Tianni Law Firm Can Help

Tianni Law Firm (江苏天倪律师事务所), based in Nanjing, Jiangsu, advises foreign parties on China disputes involving digital and virtual assets, including the threshold question of whether a claim is framed as an unenforceable contract or a protectable property right. Our work includes pre-dispute assessment, evidence preservation for on-chain and off-chain records, and litigation or arbitration over return, damages and enforcement. This article is general information, not legal advice. The 9·24 Notice and the surrounding case law continue to develop, and there is no binding uniform interpretation — so the applicable rules and the latest judicial practice should be confirmed before acting.