A court in Shandong has ruled on a case involving losses from an entrusted crypto investment.
Chinese Court: Crypto Investment Losses Not Protected—Even When Done via Friends
Another reminder from a Chinese court: crypto trading isn't a legally protected activity. In a case out of Shandong, Liu asked his friend Zhang to invest in "Elfa Coin," chasing hundreds in daily returns. Then the platform vanished. Zhang said its operator was under criminal investigation. Liu sued to get his money back.
The court ruled against him. Virtual currency investing disrupts financial order, making the entrustment contract void. Zhang didn't profit, and the loss came from an illegal activity—Liu's to bear. The judge cited 2017 and 2021 government notices: crypto businesses are illegal financial activities, and losses aren't legally protected. Even if you invest through someone else, the same rules apply.
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