In China, lending funds in crypto can be very dangerous and damaging for the lender. In a court ruling on a case involving a loan of USDT 80,000, the Nanchang People’s Court found in favor of the defaulting borrower to the detriment of the plaintiff lender. The court’s decision was motivated by the fact that Bitcoin and other cryptocurrencies are banned in China.
80,000 USDT lender rejected in China
Never lend cryptocurrency money in China. You probably won’t be able to get anything if your borrower refuses to return your money. If you doubt this, the setbacks experienced by Xiao Ming (pseudonym) may well persuade you.
April 2021, Xiao Ming loaned 80,000 USDT to Xiaogang (pseudonym). The borrower promised to repay the loan within six months. Against all expectations, the borrower failed to repay the funds within the allotted time. As a result, the lender was obliged to take legal action to demand repayment of his 80 K$ in crypto. To everyone’s surprise, it was the defaulting borrower who won the case in the Chinese courts!
Indeed, the Nanchang People’s Court has declared that Xiao Ming will not benefit from any judicial measures to recover his 80,000 Tether loan after his borrower defaults. For the court, Tether is not a fiat currency legally issued in China. This is the case for all other cryptocurrencies, which are banned in the country. As a result, any loan made in this currency, as in any other cryptocurrency, did not fall within the appropriate scope of civil litigation.
China, a country with no possible recourse for a crypto loan
As revolting as the injustice suffered by Xiao Ming is far from an isolated case in China. In this cryptocurrency-hostile country, difficulties in recovering crypto loans are commonplace.
The most striking example is that of Xu from Jiangsu who lent Lin 341 Bitcoin, or nearly $10 million. However, the defaulting borrower filed a complaint with the court and won. Indeed, the Changzhou Zhonglu People’s Court has invalidated the $10 million Bitcoin (BTC) loan agreement. The court’s decision was motivated by the fact that Bitcoin and other cryptocurrencies are banned in China.
The misadventures experienced by Xiao Ming are a reminder of the need for every crypto player to inform themselves about the legal regime applicable to the crypto sector in the states where they carry out their operations. Completely ordinary acts such as buying a property in Bitcoin (BTC) can be dangerous in certain countries. This is notably the case in Morocco, where a French citizen was sentenced to 18 months in prison for… buying a car with Bitcoin.
I dream of a world where every citizen has total control over themselves, including their finances. I believe that Bitcoin is one of the tools that will achieve this revolution. Since 2019, I am learning about this cryptocurrency and spreading the word around.
