Chinese court says unpaid crypto loans should be compensated at acquisition cost

A mid-level people’s court in Guangzhou, China, ruled that when a lent cryptocurrency is not returned, damages can be awarded based on the lender’s acquisition cost, according to Guangzhou Daily. The court said cryptocurrency cannot circulate as currency in China, but it qualifies as civil property with some characteristics of online property. In the case, the plaintiff lent one unit of cryptocurrency in 2023 and, after failing to get it back, sought either the return of the asset or payment of its yuan-equivalent value. The court found invalid a repayment agreement requiring repayment in yuan with gains from the cryptocurrency’s price increase reflected, saying that effectively amounted to a cryptocurrency exchange. It also said returning the cryptocurrency itself was not realistically possible. Instead, the court ordered damages of 199,600 yuan ($55,700), the amount the plaintiff actually spent to acquire the one token.