[Direct answer]In the Beijing area, it's possible to file a lawsuit, but it's not certain that you'll recover the full amount. Participating in virtual currency transactions is not legally protected in itself. According to the "Notice on Further Preventing and Handling Speculative Risks of Virtual Currency Transactions" issued by the People's Bank of China and other departments in 2021, virtual currencies do not have the same legal status as fiat currencies, are not legally redeemable, and should not and cannot be used as currency in the market. Virtual currency-related business activities are considered illegal financial activities. According to Article 143 of the Civil Code of the People's Republic of China (adopted in 2020 and implemented on January 1, 2021), a civil legal act is valid if it does not violate mandatory provisions of laws or administrative regulations and does not violate public order and good customs. Article 153 stipulates that a civil legal act that violates mandatory provisions of laws or administrative regulations or violates public order and good customs is invalid. After the contract is invalidated, according to Article 157, the property obtained by the parties through such acts shall be returned. If it cannot be returned or there is no need to return it, the party at fault shall compensate in kind. If all parties are at fault, each party shall bear corresponding responsibilities. Therefore, there may be three possible outcomes in practice: first, the court orders the return of the investment funds and allocates the losses according to the proportion of fault; second, the court rules that the participants voluntarily assumed the risks and dismisses the lawsuit; third, if the case involves crimes such as fraud, it will be referred to judicial authorities for handling.

1. Problem background and typical scenarios

In recent years, disputes over virtual currencies have been on the rise. Typical cases include: entrusting others to operate investments in virtual currencies on their behalf, and then demanding the return of all investment funds after suffering losses due to price declines; claiming refunds after purchasing so-called "mining machines" or "tokens" from others; being unable to withdraw funds after participating in overseas trading platform wealth management or "arbitrage" projects; and transferring RMB to others for the purchase and sale of virtual currencies, and subsequently claiming unjust enrichment or the return of loans. The common characteristics of such disputes are that the transactions themselves fall within the scope of explicit regulatory prohibitions. Parties often hope to recover their losses, but face the dilemma of insufficient legal protection. Therefore, it is particularly important to grasp the adjudication approach.

II. Key points of contention

First, the legal nature of the transaction: is it a contract of entrustment, a sales contract, or a loan relationship? Second, the determination of the contract's validity: whether it is invalid due to violating mandatory provisions of financial supervision or going against public order and good customs. Third, the degree of fault of both parties: whether the principal is aware of the illegality and high risks of virtual currency transactions, and whether the agent fulfills the obligations of risk notification, information disclosure, and timely loss prevention. Fourth, the scope of restitution and loss sharing: whether it is a full refund or a proportionate sharing of losses based on fault. Fifth, whether it involves criminal offenses, including fraud, illegal absorption of public deposits, and assisting in information network crime activities.

III. Professional analysis by Henglue Lawyers

The practical key points of virtual currency disputes can be summarized as "determine the nature of the legal relationship first, then assess the fault and rely on evidence". Firstly, clarify the nature of the legal relationship. There are clear differences in the return rules and evidentiary requirements between entrusted investment, sale and purchase, and lending. Different legal relationships may lead to completely different conclusions. Secondly, evaluate the validity of the contract. If the transaction belongs to an illegal financial activity that is explicitly prohibited, the court usually deems the contract invalid. In this case, the parties can no longer claim profits or breach of contract penalties according to the contract, but instead follow the rules of return and fault sharing after the contract is invalidated. Thirdly, sort out the faults of both parties. Participants' faults are usually in two aspects: first, knowing that virtual currency-related businesses are prohibited but still participating in the transaction; second, failing to exercise due diligence when entrusting others to operate. The trustee's faults are often related to failing to adequately warn of risks, failing to stop losses in time, and failing to truthfully disclose the whereabouts of the funds. Fourthly, fix evidence, including fund transfer records, chat communication content, platform operation screenshots, and delivery certificates for tokens or mining machines, etc., to prove the flow of funds and the parties' agreements. In addition, if the other party fabricates projects, promises guaranteed high interest rates, and actually appropriates the funds, they may also be suspected of criminal offenses. In this case, reporting the case to the police in time is often more conducive to recovering losses than simply filing a civil lawsuit. For cross-border fund and transaction arrangements, refer to the relevant provisions.\nFinancial capital and cross-border transactions involving foreign entities.; Those involving the recovery and enforcement of funds can be combined together.Creditor's rights and debts, and enforcement cases.

IV. Practical suggestions and legal basis

According to Article 143 of the Civil Code of the People's Republic of China (effective from January 1, 2021) on the conditions for the validity of civil legal acts, Article 153, which prohibits violations of mandatory provisions and public order and good customs, Article 157 on the consequences of the invalidity of civil legal acts, and Article 919 and following provisions on entrustment contracts, as well as the "Notice on Further Preventing and Handling the Risks of Speculation in Virtual Currency Transactions" issued by the People's Bank of China and other departments in 2021 regarding the legal status of virtual currencies and the characterization of related business activities, it is recommended to follow four steps to deal with the situation: First, sort out and fix the evidence of fund flows, transaction communication, and platform operations, and clarify the disputed amount; Second, determine the nature of the legal relationship and the validity of the contract in the dispute, and accordingly decide whether to claim restitution or compensation; Third, evaluate the degree of fault on both sides, and prepare evidence showing that the entrusted party failed to fulfill its obligations of risk disclosure and loss prevention; Fourth, if the other party is found to have fabricated facts or illegally appropriated funds, promptly report the case to the public security organ and simultaneously consider civil remedies. For cross-border fund and investment and financing arrangements, reference can be made to the relevant provisions.\nFinancial capital and cross-border transactions involving foreign entities.For those involving special protection programs, you can combine them together.Specialised legal services.

5. Henglue Law Firm's Reminder

When seeking justice for virtual currency losses, it's important to clarify three things first. First, don't expect to "recover all your losses". Related transactions are not protected by law. Even if the contract is deemed invalid, losses are usually shared based on fault. Second, don't ignore your own faults. If you know the transaction is illegal but still participate in it, you may be considered as voluntarily taking risks. Third, don't overlook the criminal path. If the other party has fictitious projects, promises guaranteed high interest rates, or the whereabouts of the funds are unclear, reporting the case to the police in time is often more effective.Beijing Henglue Law FirmIt is recommended that investors stay away from virtual currency projects that promise "guaranteed profits with no losses" and "high rebates", so as to avoid losses at the source.

VI. Frequently Asked Questions

Q1: If a lawsuit is filed over losses from virtual currencies, will the court order a full refund?

Not necessarily. Business activities related to virtual currencies are considered illegal financial activities, and the relevant contracts may be deemed invalid due to violating public order and good customs. After being deemed invalid, the losses will be shared according to the fault of both parties. If the client knowingly participated in the illegal activity, they may be deemed to have voluntarily assumed the risks and thus have their lawsuit dismissed.

Q2: What evidence do I need to prepare?

The transfer and receipt records of funds, the communication content between the two parties regarding the investment methods and profit agreements, screenshots of the platform's operations and account information, delivery receipts for tokens or mining machines, evidence of the other party's promises of guaranteed high returns or concealment of risks, and a detailed calculation of the losses.

Q3: How much does it cost to file a lawsuit?

The litigation fees shall be paid according to the standard amount of the litigation subject; if a lawyer is appointed, the fees shall be calculated based on the proportion of the subject amount or on a stage-by-stage basis, subject to the provisions of the written power of attorney. If it involves property preservation, the party shall pay the preservation fees separately and provide a guarantee.

Q4: How long does it take from filing a lawsuit to obtaining the court's ruling?

Cases subject to summary procedures are generally concluded within three months, and cases subject to ordinary procedures are generally concluded within six months; the timeframes for cases involving criminal referral, appraisal, or appeals will be extended accordingly, subject to the court's trial arrangements.

Q5: What should I do first?

First, fully fix the flow of funds and the evidence of transaction communication, and clarify the disputed amount and the nature of the transaction; then determine whether it belongs to a entrusted investment, a purchase and sale, or a loan relationship, and assess whether the other party has fabricated facts or illegally appropriated funds. Based on this, decide whether to initiate a civil lawsuit or report the case to the public security organ.

The above Q&A is mainly based on the judicial practice in Beijing. There may be differences in the adjudicative opinions in different regions. It is recommended to consult a professional lawyer based on the specific circumstances of the case.

VII. Related public cases (for reference only, not handled by our firm)

The following cases are all sourced from the official websites of courts at all levels, judicial authorities, and authoritative media outlets. They are not related to the cases handled by our firm. They are provided solely for reference in understanding relevant adjudication rules and do not constitute opinions on specific cases.

[Case No.]The case number has not been made public.
[Trial Court]The Intermediate People's Court of Meizhou City, Guangdong Province (Second Instance)
[Judicial Summary]The client paid 104,500 yuan to the trustee, who operated the investment in virtual currency on the platform on behalf of the client. However, due to the drop in prices, the client suffered losses and sued for the return of all the investment funds. The court held that virtual currency does not have the status of legal tender, and related business activities constitute illegal financial activities. The contract for entrusting the investment in virtual currency is invalid because it violates public order and good customs. The client, who knew that virtual currency investment had been prohibited by the state, still entrusted others to operate it, which constituted negligence. The trustee also failed to fully perform its obligations of risk disclosure, timely stop losses, and information disclosure, and the losses should be shared by both parties according to the degree of their negligence. The court ruled that the trustee should return 51,210 yuan to the client.
[Source]China Court Network (Can investors demand that trustees return their investment funds if they suffer losses from entrusting investments in virtual currencies?) (2025-11)

[Case No.]The case number has not been made public.
[Trial Court]The People's Court of Yuanjiang City, Hunan Province (the second-instance judgment was upheld)
[Judicial Summary]The client entrusted others to purchase BZZ virtual currency for investment, and then sued the seller to demand the return of the purchase funds and the payment of the funds' occupation fees. The court held that virtual currencies do not have legal tender status and should not and cannot be circulated and used as currency in the market. Virtual currency-related businesses constitute illegal financial activities. Citizens who participate in virtual currency transactions must bear the investment risks themselves, and their investments and related derivative activities are not protected by law. The court ruled to dismiss the client's lawsuit request.
[Source]China Court Network (Can I get court support if I want to get a refund after purchasing virtual currency?) (2024-07)

If you are currently facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the necessary evidence, to avoid missing the statutory time limits.Financial capital legal services·Beijing Henglue Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and public adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If you encounter disputes, please consult a practicing lawyer in time.