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Chinese Courts Side with Crypto-Exchange Despite Violations

A cryptocurrency trader in China that managed to acquire Bitcoins by accident was ordered by a court in Beijing to repay every acquired BTC to the exchange despite several accusations of a law violations.

The Ruling

The decision was finalized by the court on the 31st of July and published on the 9th of August, stating that Li Jianfeng, the trader with misallocated bitcoins must return all profit gained from five of the accidental coins sent to his account which he sold. According to reports, the wrongful allocation of these coins was a result of a glitch on a cryptocurrency exchange called Coinnice that deposited the bitcoins into Li’s account in 2017.

According to the court papers, he then proceeded to liquidate five of the BTCs for just over $6000. Following a rejection by him after being asked by the exchange to return the acquired funds, Coinnice then filed a lawsuit against Li. The case saw the exchange state that the trader was under no right legally to hold these coins, let alone sell them and keep the proceeds to himself.

Additionally, Coinnice submitted the BTC wallet assigned to Li by them and providing clear evidence of the transactions made. As a result, the Beijing court then sided with Coinnice and stating that Li was aware of the terms and conditions associated with registering on the exchange. As a response, Li claimed that by the exchange operating within China, it was in direct violation of the law and operating illegally, however, the ban on crypto-trading and dealing was not yet in effect last year.

As stated by the court, the issue surrounding Coinnice itself has no direct relation to Li and his ordered return of all the profits due to the fact that he acquired these assets in no lawful meaning hence the decision by the court. Albeit codified laws prevailing within the country’s civil law system, the ruling by the court may provide a glimpse into how China will be handling conflict in regards to digital currencies.

Another digital currency exchange, OKEx, has also been involved in a lawsuit filed against it after one BTC trader accused the exchange of failing to hand over 38 BCH following its split in 2017. Ideally, the fork between BTC and BCH meant that any trader possessing BTC during the split would also receive BCH of an equal amount although not every cryptocurrency exchange offered these coins back to their clients.

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