Discussion on the Legal Effect of the Cooperation Protocol for the Judicial Disposal of Virtual Money

Recently, a court in a certain area made a thought-provoking ruling on a case involving a Virtual Money judicial disposal cooperation protocol. The ruling deemed the relevant protocol invalid, with reasons that were rather far-fetched. This article will explore the legal effectiveness of the Virtual Money judicial disposal cooperation protocol and provide some suggestions for related practitioners.

1. Case Summary

In November 2023, Sun and Lu signed the "Virtual Money Asset Handling Cooperation Contract," agreeing to cooperate in the judicial disposal of virtual money using their respective resources. Sun paid 200,000 yuan as a performance deposit, which was kept by Lu. During the cooperation period, a dispute arose, and Sun filed a lawsuit in December 2024, requesting the termination of the contract and the return of the deposit and interest.

II. Court Ruling and Reasoning

The court ruled that the contract is invalid and simultaneously rejected Sun's request for the return of the deposit.

(1) Reasons for Invalidity of the Contract

The court held that, according to the "Notice on Preventing the Risks of Token Issuance and Financing" issued in 2017, virtual money is not legal tender and that the exchange business between fiat currency and virtual money is prohibited. The court believed that the actions of both parties indirectly supported the exchange between virtual money and fiat currency, which violates social public interests, therefore the contract is invalid.

(2) Reasons for not returning the margin.

The court determined that both parties constituted an actual partnership. According to the relevant provisions of partnership law, partners are not allowed to request a division of partnership property before the termination of the partnership relationship. Therefore, the court does not support the claim for the return of the deposit.

3. Issues with the Judgment

1. Improper basis for the judgment: The 2017 announcement referenced by the court primarily targeted token financing trading platforms, rather than cooperative agreements between individuals. The "Notice on Further Preventing and Dealing with the Risks of Virtual Money Trading Speculation" issued in 2021 is more applicable to this case, but still insufficient to directly determine the invalidity of the agreement.

2. Ignoring the legality of judicial disposal: The judicial disposal of cases involving coins, whether preemptive disposal or centralized disposal, has clear legal basis, and its effectiveness is higher than that of industry regulatory documents.

3. Misunderstanding of the disposal process: Compliant judicial disposal is usually conducted abroad for the conversion of Virtual Money, and then the funds are exchanged and brought into the country, in accordance with existing regulatory requirements.

4. The determination of the partnership relationship may be inappropriate: If there is no direct evidence proving that both parties are in a partnership, it may be improper to classify the margin as a partnership contribution.

4. Suggestions for Practitioners

1. Gain a deep understanding of relevant laws and regulations: The judicial disposal of Virtual Money is a legal and compliant business, and practitioners should be familiar with the relevant legal basis.

2. Standard Cooperation Protocol: When signing the cooperation protocol, clearly define the rights and responsibilities of all parties to avoid ambiguity.

3. Retain complete evidence: Properly keep all relevant documents and transaction records to protect your rights in case of disputes.

4. Pay attention to policy changes: Policies related to Virtual Money may be adjusted at any time, and it is necessary to stay informed of the latest developments and make corresponding adjustments.

5. Seek professional legal advice: When encountering legal issues, it is advisable to consult a lawyer or legal advisor with relevant experience.

Although Virtual Money has existed for more than a decade, many judicial authorities still have insufficient understanding of it. With the popularization of blockchain technology and related knowledge, it is believed that the understanding of Virtual Money by the judicial system will continue to deepen in the future, and related judgments will become more reasonable and fair.